^-■^ "^w»^««^^»^»^^-^ 





\>/ /JUT- %,** .va&fcfc % 







*7. 



<f*4 













.. V*^'V %*^ T V 9 %'V^-^ 




^ ^ 
W 






Ao 




* X^ ^ 






"Our Daily Bread" 







Must be Freed From the Greed 



OF 



Private Monopoly 



BY 

H. L. LOUCKS, 
Watertown, S. D. 



PRICE, 40 CENTS 

Four Copies for $1.00 



% 






"Our Daily Bread" 




Must be Freed From the Greed 



OF 



Private Monopoly 



Copyrighted 1919 by 
H.-L..LOUCKS. 



PRICE, 40 CENTS 



Agents wanted in every community. Write for terms to agents. 







THE AUTHOR 



MAY 9 !9|g >CLA5l5464 



Foreword. 



"With the lower classes in Europe bread is the 
Fetish of food and without the loaf you could not pre- 
serve tranquility." 

"Food is more necessary than arms, and munitions 
and fighting men." 

"I feel it my duty to emphasize that the food sit- 
uation is one of the utmost gravity ,which unless solved, 
may possibly result in the collapse of everything we 
bold dear in civilization/" — Hoover, the agent of our 
Aliies, and the neutral nations of Europe. 

President "Wilson: "Upon the farmers of this 
country in large measure rests the fate of the war and 
those of the allied nations." 

"In this greatest of human needs I feel that the 
American farmer will do his part to the utmost." 

"By planting and increasing his production in 
every way possible every farmer will perform a labor 
of patriotism for which he will be recognized as a sol- 
dier of the commissary adding his share to the food 
supply of the people." 

Such was a part of the appeal made to the Amer- 
ican farmer. 

And our immense crops was the practical answer. 

How was the main food product — wheat — handled ■ 

For details see report of Federal Trade Com- 
mission. 

Representative Keating, of Colorado, said in Con- 
gress Sept 5th, in part : 

"In Great Britain 32 ounces of bread sells for 11 
cents ; in France, 35 ounces for 9 cents ; in Italy, 35 
ounces for 8 cents, and in Belgium, 35 ounces for 9 
cents. In AVashington. D. C, 14 ounces sell for 10 
cents." 

"Remember, the grain which goes into this bread 
was raised and sold by American farmers ; that freight 



4 THE MILLtERS 5 ANl MIXERS 5 PARADISE 

w - raid to the seaboard .and the highest cargo rate in 
history was paid for its shipment across the Atlantic.'" 
• ' What reason can be assigned, then, for the fact 
that bread is sold cheaper 5,000 miles away from the 
original wheat field than it is at home I" In z .-. : : . z : : 
less ~han one-half the pr: 

MINNEAPOLIS THE PARADISE OF THE MIXERS 
AND MILLERS. 

Minneapolis, the great wheat terminal, beeame the 
Paradise of the mixers and mill- 

American dtizens who would take advantage of 

critical :»rld condition to increase the misery 

d suffering of the whole civilized world by doubling 

the price of bread for private profit, are far worse than 

the pirates of old. They preyed npon their enemies 

for the benefit of their friends. 

Our mixers and millers preyed upon our Allies- 
broke faith with our government, and exacted an extra 
gss profit, from us, during the war. With an armis- 
tice and prospective peace and the raising of the alleged 
eontrol by the food administration the price of flour and 
mill-stuffs were advanced for our home needs. 

The system that permits of such abuse of a vital 
:: should be deprived of any further oppor- 
tunity. The lesson of the war must be heeded. 

All unnecessary profits in the handling, transpor- 
tation, manufacturing and distribution of food product? 
between producer and consumer must be eliminated. 

Bread is not only the "Fetish 5 'of the "lower 
-lasses of Europe", but also of the middle classes, and 
the upper classes of the whole civilized world, and 
inr#t be freed from the greed of private monopoly. 

That is the hoped-for mission of this little book. 



Profits vs. Patriotism. 

A safe axiom to follow is, that you can best judge 
a person^ estimate of you by his manner of addressing 
you ; and just as true of a public speaker, editorial 
writer, or business exploiter, or of the student, or 
statesman, whose aim is the uplift of humanity, or oi 
the practical politician whose aim is public office foi 
private gain ,and just as true in a time of stress and 
cruel Avar as in a time of peace and prosperity. 

Before our participation in the great world's war 
our leading industries had been enjoying a period oi 
unexampled prosr>erity and undreamed of profits. They 
were well organized, with one exception — Agriculture. 

The European belligerents had opened up an im- 
mense field for exploitation ; the organizations co-oper- 
ating to take advantage of it were numerous, and there 
was no exception made in favor of our own citizens. 

Our entry into the war increased their opportuni- 
ties by giving a great stimulus to increased production 
of everything needed to "aid in winning the war." 

As the first illustration of our axiom we give the 
origin of the policy that was adopted, by those whose 
chief aim (no matter how carefully camouflaged) war 
the maximum of profits to be secured during the con- 
tinuance of the war, and protection for same after- 
wards. 

The organization was called the National Foreign 
Trade Council; and the object was profits at home as 
well as abroad. 

Thpv were no respectors of the source ; it was pro- 
fits, more profits; the world to pay tribute to American 
profiteers. 

The organization was- composed of our leading in- 
dustrial, commercial and financial repersentatives ; such 
as would command respect. - 



6 FOEEIGN TEADE COUNCIL SUBMITS POLICY 

They were dollar a year, volunteer patriots to 
control prices, every one willing to advise how his own 
business should be managed in accord with their pro- 
gram. 

They prepared a very complete report containing 
recommendations as to the most effective means of 
winning the war. 

The report was prepared by Lewis F. Pierson, 
chairman of the board of directors of the Irving Na- 
tional Bank of New York, and this with the imposing 
list of officers and backers gave it the proper stamp of 
efficiency and successful business: that would impress 
the public, and more especially members of Congress 
and national officialdom. 

That it did so impress them is confirmed by the fact 
that it was adopted as the federal official policy in 
dealing with every industrial, commercial, or financial 
business in the nation with the one exception — Agri- 
culture. In this they paid the farmers of the nation 
the very highest compliment possible; in appealing tc 
their patriotism and love of country, and a WOELD 
FEEE FOE DEMOCEACY, instead of their greed for 
gain. 

The appeal was well founded ; for the farmers re- 
sponded nobly, just as they have always done in everv 
hour of emergency, since the farmers of the Mohawk 
Valley of New York met in the farm home of Adam 
Loucks, my great great grandfather, and organized the 
"Minute Men" who became such an inspiring force in 
the revolution which made America free for democray. 
Now, a few extracts from the report of the Na- 
tional Foreign Trade Council which was presented 
to President Wilson Nov. 26, 1917, and later to the 
ways and means committee of the house of represen- 
tatives and to the finance committee of the senate. 
Unlike the efforts of the organized farmers as told 
by Eepresentative Steenerson, they were not "with- 
out avail", but were promptly adopted, with the one 
exception mentioned — Agriculture. 



AGRICULTURE NOT INCLUDED 7 

From press reports: "It was drawn up in an ef- 
fort by the council to aid the government in the fixing 
of commodity prices and in the taxation of business 
profits." 

"High production and not low prices should be 
the controlling consideration in an ideal plan for price 
fixing and profit taking." 

"Effectiveness of American participation in the 
war demands the maintenance of production in prac- 
tically all lines at the maximum capacity, and the main- 
tenance of foreign trade is a most efficient means of 
preventing disturbance of credit, insuring funds with 
which to meet the needs of government in taxation or 
loans ; stabilizing conditions of industry and maintain- 
ing the economic structure of the nation." 

"For these reasons the Council recommends to the 
administration and Congress the co-ordination of its 
efforts at price fixing and taxation upon principles that 
will stimulate production, insure the fullest maintenance 
of foreign trade and so provide a ready source of funds 
for the vigorous prosecution of the war. The only 
really big thing in the world today is to win the war. ' ' 
In the opinion of the council, however, as expressed 
by their business plans, the really "big thing" was the 
securing of maximum prices and provide for the mini- 
mum of taxation on war profits- 

Although agriculture was recognized as "the most 
important arm of war, more important than arms, and 
munitions and fighting men," there was no effort made 
at "price fixing" for farm products "to stimulate 
production"; but the very reverse. 

The price of wheat was fixed at one-third less than 
the market, and an increase to compensate for increased 
cost of production denied, but the price of flour and 
bread did not follow down. 

Had not the Secretary of Agriculture enunciated 
the policy of his department clearly in the 1914 Year 
Book, page 35. as follows: "There seems to be no 
emergency which requires or justifies government as- 



8 WILL SOUTH DAKOTA LEAD? 

sistance to the farmers directly through the govern- 
ment's cash, or the government's credit. The Ameri- 
can farmer is sturdy, independent and self-reliant. " 

That turned the trick for free trade in farm prod- 
ucts and in the farmers' rural credit betrayal; so now 
when the farmer is to be discriminated against, once 
more, and the price of his wheat "fixed 7 '; he need 
only to be '"stimulated to greater production" by ap- 
pealing to his patriotism. 

Bread is now recognized the world over as our one 
great vital necessity. The high cost of food even now 
is endangering the peace of the whole civilized world. 

Our food profiteers, having secured a monopoly 
of handling, manufacturing and distributing food have 
reversed the custom of the ages in relieving threat- 
ened starvation, by free, or cheaper, food; by increas- 
ing the price to everybody, including the producers. 

The governments of the whole civilized world have 
been forced to commandeer, regulate and control the 
price of food. 

The Lnited States alone has proven powerless, un- 
able, or unwilling ,to control our food profiteers. In 
fact have encouraged them to "stimulate production." 

"What our Federal Government has failed to do. oui 
great agricultural states must do, for self -protection, 
if for no higher motive. 

The organized farmers of Dakota pointed out the 
way thirty-one years ago. 

South Dakota leads in the production of farm prod- 
ucts. 

The consumer cannot use a part of our farm prod- 
uts; they must first be manufactured into food prod- 
ucts. That is our next great task and duty. Will 
South Dakota continue to lead? 



Development of Co-Operation. 

■ In 1885 1 had between 500 and 600 acres in wheat. 
It was a good, clean crop. My business experience 
said that I should sell that wheat to the best advantage 
and it also said that I should give the preference to 
the local dealer. 

Now, with 10,000 to 12.000 bushels of wheat tc 
sell, it was natural that I should be looking for a con- 
sumer. 

I learned that The Union Mills, of Waterloo, Iowa 
would be in the market for Dakota wheat, and cor- 
responded with them, agreeing to send them a sample 
when ready for market. But I also remembered the 
local buyer, and when the Avheat was ready for mar- 
keting, took in two samples. 

The local buyer offered me 62 cents, two pounds off 
for dockage. I remonstrated that there was no dock- 
age. He agreed with me, but said the rule was two 
pounds off no difference how clean the wheat was, 
and he could do no better. 

I promptly received an offer for the whole crop 
from the Waterloo Mill of 72 cents straight, making a 
difference of a little over 12 cents per bushel. Of 
first loads went in the grain buyer got busy and offered 
by a private shipper at Clear Lake., and when the 
first loads went in the grain buyer got ^asy and offered- 
me 67 cents two, pounds off. 

Of course, my neighbors were interested. The Ad- 
vocate also gave it as an item of news. 

We discussed it at our next Alliance meeting, but 
no one had a carload, or teams to load a car in the 
time allowed, and I then suggested thatthey unite and 
load a car at a time, but with the difference in grades 
and dockage it seemed impracticable. 




10 DEVELOPMENT OF CO-OPERATIOX 

When I attended the Territorial Allance meeting in 
TTatertown the following January. I was surprised to 
learn that there were 35 co-operative farmers' ware- 
houses in the Territory. 

Quoting from the Deuel County Advocate's report 
of the meeting in re co-operation : 

"There were no bitter denunciations of any com- 
binations or monopolies, but plain business propositions 
whereby a corporation of farmers by combining their 
mutual interests were prepared to demand and receive 
attention and concessions on a business basis. This is 
the keynote of success to the entire alliance movement. 
Mutual combination of mutual business, conducted on 
a business basis." 

THE EVOLUTION OF A CONSERVATIVE. 

When we entered the hall President Carlisle was 
delivering his address. It was a straight plea for 
the farmers to organize for independent political ac- 
tion. I said in surprise to my neighbor, '""Why, that 
is all wrong, the farmers should not meddle in poli- 
tics ': and I was sincere in my belief then. I had 
eschewed politics to attend strictly to business, when 
I came to the United States. I was a firm believer in 
gold as the one unchangeable standard of value. The 
bankers had always been very kind to me. and I be- 
lieved that they should understand the money question 
better than a layman. That was their business. 

I thought the railroad system was all right. I 
had been doing a very large business with them as a 
.contractor, and had been unusually well treated by 
them. 

I mention these facts in justice to many men whose 
environment is and has been the same as mine had 
been. 

AVith a new environment, and official reponsi- 
bility as the representative of a class, it was my duty 
to study and investigate the problems of my class with 
an open mind, seeking the truth, and gave my reasons 



THE EVOLUTION OF A CONSERVATIVE 11 

for a change of opinion frankly, without abuse of those 
who still thought as I had. 

I eoneeded that they might be just as honest as I 
had been, and the best way to reach them was to start 
them thinking, by appealing to their reason, instead of 
ridiculing them, or charging them with ignorance, dis- 
honesty or servility. 

There is always hope for the man or woman who 
will read and think with an open mind. 

After election as president of the Dakota Farmers 
Alliance in January, 1886, it became my duty to study 
our farm problems "with an eye single". I saw an in- 
terview in the St. Paul Pioneer Press, early in April, by 
Capt. Griggs, chairman of the Dakota Railway Com- 
mission, which at first amused and then interested me 
sufficiently that I answered it. On advice of Mr. Gat- 
chell, editor of the Advocate, copies were sent to all the 
papers in the territory, and it was largely reprinted. 

To my very great surprise it resulted in more than 
100 Alliances being organized by correspondence in less 
tha ntwo months ; one in Jamestown with 200 members 
which furnished North Daota with its first governor, 
F. B. Fancher. 

Within a week of publication Mr. Evans, of Mil- 
bank, a member of the Board of Railroad Commission- 
ers, came to see me. It was all Greek to him, but 
I convinced him that I was right, and he promptly 
went to Chicago and the result was a reduction of 25 
per cent in freight rates and a reduction of passenger 
rates from four and five cents per mile to three cents. 

Not for its literary merit — it was my first official 
production — and no one was more surprised than my- 
self with its result, but as a turning point in the Alliance 
movement, the letter should be preserved, and is here- 
with given to the public a second time. 

For effective and prompt results I doubt if it has 
ever been duplicated by any farmers' organization. 
The effort was strictly nonpartisan. 

The Alliance members at that time paid no dues. 
The only charge was $2.50 for a charter. The presi- 



12 DEVELOPMENT OF CO-OPEEATIOX 

dent received no salary, and paid Ms own expenses. 
The reduction of six cents per 100 pounds on grain to 
Minneapolis from Eastern Dakota points was secured 
in less than 60 days, and was a permanent reduction. 
I wish our State Historian would figure up just 
how much that has meant to the farmers of Dakota, 
North and South, since 1886, and give the good old 
Farmers Alliance credit for it. 

President's Office, Territorial Farmers' Alliance. 

Clear Lake. Deuel Co.. Dak.. April 30. 1886. 
(^From the Deuel County Advocate.) 
To the Honorable R. R. Commissioners of Dakota. Gen- 
tlemen: 

Lntil I saw the above item in the Pioneer Press. I 
had forgotten that we had any R. R. Commissioners in 
Dakota, and it occurred to me that your extreme mod- 
esty was doing you an injusice in keeping your light 
hid under a bushel and that I would be doing a char- 
itable thing to unveil such wonderful modesty. I was 
under the impression that the R. R. Commissioners were 
appointed to consider the interests of shippers and 
not those of the R. R. Companies. I was innocent 
enough to think that the railroads employed the very 
best talent in the country to look after their interests. 
In this I seem to have been mistaken and that is the 
special mission of our R. R. Commissioners to guard 
the prosperity and increase the surpluses of the R. R. 
Companies. I am sure the R .R. Companies must ap- 
preciate your thoughtfulness in not *' wishing to embar- 
rass them."" Have you ever thought of the very em- 
barrassing position in which a large number of the 
farmers of Dakota are placed, and which might have 
been relieved by a reasonable reduction of freight 
rates? Before encouraging the railroads to accumulate 
surpluses, would it not be advisable to learn the amount 
of surplus the farmers are able to lay up under exist- 
ing rates and prices? You admit that we are not get- 
ting a living price within 10 to 15 per cent for our 
wheat. You estimate a saving by your proposed reduc- 
tion of rates of $33 per every 10 acres of wheat grown. 



AN OPEN LETTER TO GAPT. GRIGGS 13 

You assure us, "I am certain that I can secure any- 
thing within reason from them," the R. R. Companies. 
You think the above reasonable; then why in the name 

of common sense and suffering' humanity should you 
allow your modesty to prevent you pushing- this mat- 
ter at once. In a ease so plain, with the R. R. Com- 
panies so anxious to comply, why "wait until fall 
when we see what the crop is likely to be?" Surely 
your great modesty will not prevent your saying* the 
word and securing us just a little relief out of j^our 
abundant store! You cannot secure it too soon, and 
then you know while you are waiting and watching 
the growing crops the R. R. Companies may change 
their minds if they think you mean business. "Wait- 
ing to see how the crops will yield/' will, I fear, result 
in the old game, "heads I win, tails you lose." If 
the crops are good your warm interests in the R. R. 
Companies may induce 3 r ou to think that the farmers 
could afford to pay present rates which would enable 
the R .R. Companies to add to their surplus, etc. If 
the crops are poor, why of course they cannot afford to 
reduce their rates when there is likely to be a falling 
oif in freight. Then as to incoming freights. You 
think there should be a reduction. You are certain 
you can secure it. You estimate a saving of $3 on gro- 
ceries, etc. If you add farm implements, lumber and 
twine you could, no doubt, raise that estimate several 
times. Are you aware that the bulk of such necessi- 
ties will be needed before fall? If not I hope you will 
forget your modesty long enough to investigate and 
push for a reduction at once, you cannot do it too soon 
for your reputation and our pockets. There is an- 
other subject to which I would like to call your atten- 
tion, viz. : The rate on wheat to Chicago to which, or a 
corresponding point, we are compelled to pay freight 
on all shipments of wheat. Take for instance the rate 
from AYatertown to Chicago is 33 cents. That was the 
rate when transit from Minneapolis to Chicago sold for 
15 cents and was protected at that by the R. R. Com- 
panies interested . Transit has lately fallen as low as 9 



14 DEVELOPMENT OF COOPERATION 

cents. We used to figure the freight to Minneapolis at 
18 cents, thence to Chicago at 15 cents. Now we must 
figure from Minneapolis to Chiacgo 9 cents and from 
AVatertown to Minneapolis 24 cents, or a discrimination 
against Dakota of 6 cents per cwt. I understand the 
R. R. Commissioners of Minnesota secured a flat rate 
to Minneapolis or made it optional with shippers to 
ship in transit, and then when rates were reduced 
from Minneapolis to Chicago induced the R. R. Com- 
panies to pro-rate from points to Chicago. Result : just 
across the line in Minnesota wheat is worth 6 cents per 
cwt.. more than in Dakota. The Minnesota R. R. 
Commissioners seem to think that it is their duty to 
look after the interests of shippers. They are living 
for the present generation. They do not wait and 
watch the growing crops. They do not "proceed in a 
modest sort of way." They mean business "and get 
there." Please do not let your precious modesty pre- 
vent your pushing these matters just a little now. I 
hope you are not too modest to draw your salary while 
waiting and watching. By the way. don't you think 
that the farmers of Dakota will soon think you are 
quite too modest for the position of Railroad Commis- 
sioners? I have no doubt that the R. R. Managers just 
dote on R. R. Commissioners who "proceed in a mod- 
est sort of way." It is a virtue so rare in their ranks 
that I am sure they consider it a "jewel of the first 
water." 

Yours truly. 
H. L. Loucks, 
Pres. Dakota Farmers' Alliance. 
Note. — The policy of watchful waiting was not 
original with President Wilson. 

SPECIAL SESSION TO CONSIDER POLITICAL 
SITUATION. 

The rapid growth of, and increased interest in, 
the Alliance caused a very general request for a spe- 
cial session "to consider the political situation," and 



SPECIAL SESSION FARMERS ALLIANCE 15 

,-i special session was called to meet in Aberdeen July 
7th . The Knights of Labor were invited to participate. 

The meeting was a large and an enthusiastic one. 
and open to the general public. 

The two most prominent features Avas the report 
of the committee on transportation which read in part : 
"Regarding the railroad commissioners of Dakota, 
created by act of the last legislature, your committee 
beg to report : Until a very recent date their useful- 
ness and efficiency is a matter of grave doubt. Within 
the last ten days, however, they have given evidence 
of a desire to try and merit the approval of the peo- 
ple whom they were appointed to serve. Chairman 
Evans has stated to one of your committee within that 
period that he has a written agreement with the man- 
agers of the Manitoba and Northern Pacific railroads to 
reduce their general freight rates at least 25 per cent. 
and their passenger rates from four and five cents to 
three cents per mile for round trip tickets. This agree- 
ment to take effect August 1st. He further says that 
he expects other roads doing business in the Terri- 
tory will make the same agreement. ' ' 

Col. Smedley, chairman of the committee, was a 
member of the Legislative Counsel and was largely 
instrumental in securing the passage of the law pro- 
viding for the Board of Railroad Commissioners. 

DECLARES FOR INDEPENDENT POLITICAL AC- 
TION. 

The committee on platform reported in part as fol- 
lows : 

"Whereas, It is a matter of prime importance that 
the next legislature of this Territory should be con- 
trolled by men who are thoroughly in sympathy with 
the Alliance movement, its aims and purposes, and 

"Whereas In the past the farmers have left the 
management of political affairs almost entirely in the 
hands of professional politicians and , 

"Whereas, They have generally ignored the wishes 



16 DEVELOPMENT OF CO-OPERATION 

and interests of the agricultural classes, legislating in 
their own interests until the burdens upon the agricul- 
tural interests have become too grievous to be borne : 
the profits of our labor are absorbed by the manipula- 
tions of monopolies already gorged to plethora from the 
unjust extortions wrung from honest toil through .the 
machinery of such legislation, and. 

"Whereas, Our only hope of relief from these evils 
is by securing members of the next legislature, why by 
ties of personal interests are in full sympathy with our 
movement; therefore be it 

■ Resolved. As the sense of this convention thai 
every member of the Alliance and. all practical opera- 
tive farmers, mechanics and laboring men should con- 
sider it their duty to attend the primaries in hi- 
trict and use all their influence to put in nomination 
men who represent our views, and also to pledge every 
nominee upon the following point- : 

•'1st. To favor a Territorial railroad commit 
elected by the people. 

"2nd. To favor giving to the railroad commission 
full power to fix maximum rates of fare and freights, 
provided that such rates be not reduced below a 
to yield a reasonable dividend on actual investment in 
such roads when rates are equitably divided over the 
full length of said road. 

* "Resolved. That any person nominated for a 1-^ il- 
lative office who shall refuse to subscribe to these 
pledges is unworthy of the suffrages of any member of 
this order or the laboring and producing classes of this 
Territory. 

"Resolved, That we are in favor of such legisla- 
tion as will secure us a free market for our produce. * ' 

THE 1886 CAMPAIGN. 

We had no expense money, and made no assess- 
ments for campaign purposes. ~We made a general ap- 
peal to the voters, and the press being more than 
friendly it was widely printed. 






ANOTHER STEP FORWARD 17 

The President was too busy on his farm to do 
more than write letters after the day's work was done 
and we had no paid organizers. 

The result was an agreeable surprise. "We elected 
the House by a large majority, and had a small major- 
ity in the Council. That is. we captured both branches 
of the Legislature. 

Our bill "To secure a free market for our pro- 
duce" although strongly opposed by the railroad and 
grain exchange lobby, was passed by the House and 
would have passed the Council, had it not been for a 
trick of a member of the Council, who got possession 
of the bill by stealth and it was reported lost, when 
it was too late to prepare and rush another bill through 
both houses. He had the shameless bravado to exhibit 
it as a legislative trophy on the train next morning. 
a ft e r a djournment . 

At that time our idea of "a free market, '* was per- 
mission to build elevators, or flat warehouses on side 
tracks, or be furnished cars to load on side track. 

There was no material change made in program 
at the annual session held at Mitchell December 22 
1886. I w T as urged to attend the legislative session at 
Bismarck, and on the eve of leaving home wrote to all 
the Alliances, in part, as f ollow- s : "The legislation 
we are aside ~ for, intelligently carried out, should 
make a difference to us of twelve cents per bushel on 
every bushel of wdieat w T e have to sell. That much is 
being taken from us unjustly now. Is it any winder 
that Ave can scarcely make both ends meet? 

The 1887 session of the Territorial Legislature 
demonstrated very clearly the close community of in- 
terests between the railroads and our grain exchanges. 

ANOTHER STEP FORWARD. 

My experiences at Bismarck convinced me of th< 
very great difficulty if not impossibility of regulating, 
or controlling, either our transportation system, or our 
then system of marketing our grain. They had grown 
to be monopolies, and w T ere wielded together by a com- 



18 DEVELOPMENT OF CO-OPERATION 

nranitv of interests. At that time we were supposed 
to have legislative control of our railroads in the Terri- 
tory. And could, if we would, by securing control of 
the legislature compel permission of erecting grain 
warehouses -at all stations, and thus ship our own grain : 
but we could not control inter-state rates. 

At the request of the Northwestern Farmer on the 
eve of an organizing tour in the Red River Valley, 
North Dakota, in the summer of 1887 I wrote in part as 
follows: "In my dreams for the future I see The 
Farmers Alliance the most powerful of organizations. 
MUTUAL PROTECTION OUR AIM, EQUAL AND 
EXACT JUSTICE TO ALL MANKIND OUR MOTTO. 

"In Dakota I see every county thoroughly organ- 
ized. I see the railroad problem solved by the Terri- 
tory building a railroad of our own running from Pem- 
bina to Yankton at the actual cost of labor and mate- 
rial. No watered stocks. A water outlet to the South 
via Yankton and an air line to Duluth, or Sault Ste. 
Marie, giving us a water outlet to the East. 

"I see a Legislature assembled that will not de- 
pend on Interstate Commerce Commissioners, nor on 
state railroad commissioners to regulate rates ,but will 
absolutely fix such rates as are just and reasonable on 
what the railroads should have cost and no more. 

"I see a line of elevators along our railroad to 
which all the vast millions of bushels of the world fam- 
ous Dakota wheat will be consigned from all points in 
Dakota. I see an Agent of the Alliance at New York, 
or Montreal, accepting bids from the millers of Europe 
at a price that will yield us a handsome profit on our 
labor, and all will be peace and prosperity. 

"It is in our power to make the dream real, if we 
will." 

At that time I had never heard of a state owned 
railroad or grain elevator, but I was convinced that 
nothing short of the state could compete with thos? 
privately owned and operated utilities. 

The idea of having the road run from Pembina to 






GULP AND INTERSTATE RAILWAY 19 

Yankton was based on the fact that all our railroads 
then ran east and west . 

That all of our grain had to go east to market. 
We could control the rate from any part of the Terri- 
tory to the eastern border, thus far on the way to mar- 
ket. The line would run through the larger towns 
of the eastern border. Then in such towns located on 
privately owned railroads have a state owned terminal 
elevator, where the grain could be transferred to our 
state railroad, if the railroad would not give us fair 
rates east. 

We aslo urged the farmers to organize local co- 
operative elevator companies at all primary market 
towns. 

Later I advocated an inter-state and gulf railroad, 
running south to Port Arthur. Texas . Each state and 
territory along the line to build the road within their 
own state and unite for interstate traffic. 

For a time we were making good progress, hav- 
ing secured the support of the governors of North 
Dakota, Nebraska, Kansas and Arkansas, and securing 
fine terminal facilities at Port Arthur, Texas, but the 
majority of the men actively engaged in the propa- 
ganda, thought they could make greater speed by a 
co-operative company and against my advice organized 
as such, and private monopoly soon got control of the 
project and killed it, proving my contention that noth- 
ing short of the state could compete with a private 
monopoly. 

With a study of the problem, and a growing belief 
that the Minneapolis Chamber of Commerce had not 
been organized to help farmers, but to exploit them. 
and that it Avas the surplus crop exported, that fixed 
the price of all wheat sold at home, and that the cost 
of transportation and handling to the world's market 
was deducted from the world's price at the primary 
market, even though the wheat was grouni in the 
home town, caused us to look farther than Territorial 
bounds and we had a vision of the state shipping 
direct to the millers, even in Europe. 



20 DEVELOPMENT OF CO-OPERATION 

In other words, "from producer to consumer"' had 
grown from the farm to the nearby mill, to the farmers 
of the state shipping direct to the millers who would 
pay the best price for the wheat, even though that 
meant a shipment to Europe. 

We had not yet grasped the idea, that there was 
what we might call the ultimate consumer, the man who 
ate the bread, to be considered. 

THE 1887-8 ANNUAL SESSION. 

The annual session held at Huron that year was !>y 
far the best we had ever held. So far as the topic 
under consideration is concerned I think that I can- 
not do better than to use a write-up of the convention 
by one of our acknowledged historians of "Early Da- 
kota Days," E. C. Torrey, in the Minneapolis Journal 
of the issue of January 3, 1918 : 

Thirty years ago H. L. Loucks, president «;f H he 
Dakota Farmers Alliance, in an address before the 
annual meeting at Huron, struck the keynote for all 
the farmer movements that have since developed. r; } e 
principles he advocated at that time are those today of 
the Society of Equity, the Farmers Union and to a large 
extent the Nonpartisan League. It was at the Huron 
convention in the winter of 1887-88 that he recom- 
mended the following planks in the Alliance platform : 

Construction of terminal elevators. 

Political independence and support of men rather 
than parties. 

Reciprocal demurrage charge governing the fur- 
nishing of cars for the shipment of grain. 

Repeal of import duties on every article for the 
manufacture or sale of which a combination or trust 
has been formed. 

Independent candidates for office whenever the old 
parties nominate men known to be hostile or indiffer- 
ent to the purposes of the Alliance. 

Construction and operation of co-operative flour 
mills, packing plants and other industries within the 



1887*8 ALLIANCE SESSION 21 

state to the end that the finished product only of the 
tanners should be shipped out of the state. 

Here then was embodied the Nonpartisan idea of 
political action. He said: 

"I would like to see the day when our wheat, will 
all be ground in Dakota and the flour only sent abroad ; 
when our livestock instead of being shipped out alive 
is slaughtered in Dakota and the cured product only 
exported. ' ' 

Certainly the Loucks leadership did not lack for 
initiative and aggressiveness. True, it made no efforts 
then or later to overturn state constitutions and to write 
new ones so that the bonds and the credit of the state 
could be used to establish mills and packing plants. 

But in another respect these men set the pace for 
Nonpartisan League leaders today. They undertook to 
build a railroad from the head of the Great Lakes to 
the Gulf. They called it the Gulf & Interstate. Mr. 
Loucks urged it in his address at Huron, but it was 
not until early in the 90 's, when he had been elected 
president of the National Farmers Alliance, that the 
project took tangible form. 

Mr. Loucks wanted a trunk line constructed and 
operated by the government or the states as an ex- 
periment in government ownership. Freight rates 
charged in Dakota were then higher than rates for like 
service on the eastern ends of the same roads. As the 
traffic furnished by the pioneers was chiefly interstate, 
power to regulate by state legislation was lacking. 

Port Arthur, Texas, on the Gulf of Mexico, was to 
be the southern terminus of the proposed road, and 
either the Canadian twin ports of Port Arthur and 
Fort William, or the American ports of Duluth and 
Superior, were to be the northern terminus, thus assur- 
ino* water connections. It was planned to build the 
line parallel with and as near the eastern boundary as 
practicable of the prairie states of North and South 
Dakota, Nebraska, Kansas, Oklahoma and Texas. The 
railways of these states generlly run east and west, 
and Mr. Loucks contended that, with a great north and 



devil : : : ient of co-opekat: 

southroad crossing them it would be easy for the states 
to regulate the rates on freight originating in western 
districts to the junction points. Each state could con- 
trol traffic within its own jurisdiction, while traffic out- 
side would be regulated by the interstate board. 

The project was supported by hundreds of com- 
munities, and for a year or so made great headway. 
Port Arthur provided terminals without cost, and even 
helped to build a section of road bed. The executives 
of the states generally gave approval and the governor 
helped to build a section of roadbed. The executives 
of Nebraska called a conference. 

Matters seemed to be going along swimmin^ -~ 
until Wardell and other Alliance men conceived the 
idea of enlisting individual co-operation, with a pledge 
to turn the property over to the states when they were 
ready to receive it. Loueks had opposed this plan, 
holding that the road could not be financed by any 
means short of the state. Subsequent developments 
served to confirm his belief, for in a year or so the 
creditors took possession and another farmers 7 dream 
had failed. 

In all his work Mr. Loueks was accustomed to ap- 
peal to reason and judgment, never to passion and 
prejudice. "Our remedy/* he used to say, "lies not in 
abusing the railroad, elevator, manufacturing or coal 
monopolies, trusts, or combinations. That might relieve 
our feelings, but not our finances. So long as they can 
gather the plums, they can laugh at the abuse/ 7 When 
he set out to organize the People's party, he was as- 
sailed bitterly by the republican and democratic press 
of his state. Often his friends counseled libel suits 
but he refused. 

I was with the Aberdeen Mews :iien and I well 
remember when Mr. Loueks came to town to open the 
Brown county campaign. The Xews was the leading 
republican paper of the northern part of the state, and 
its editor missed no opportunity to attack Mr. Loueks 
It was expected the Alliance president would get back 
at the Xews, and the "operahouse" was packed to 



ROCHDALE CO-OPERATIVE SYSTEM 23 

suffocation. The editor of the News had the courage 
of his convictions and went along with the rest to sec 
what happened. 

Mr. Loucks said that before taking up the prin- 
ciples of the new party, he would first consider objec- 
tions that had been made to it. Quoting a saying oj' 
Ignatius Donnelly, that in all such discussion, it was 
well to admit as much as one could, he said that the 
first and worst objection made was that "Loucks was 
a bad man." 

4 'Now I am going to admit that," he added quick- 
ly. Then, after an effective pause, he continued. 

"And if any of you doubt it, I am prepared to 
prove it by the Aberdeen News." 

The independents lifted their voices as one man, 
and the old building rocked under the force of the 
explosion. "Without abuse, Mr. Loucks had fairly turn- 
ed the tables on his opponents, and most of them were 
good enough sports to admit it. 

— Edwin C. Torrey. 

THE ROCHDALE CO-OPERATIVE SYSTEM INTRO- 
DUCED. 

The co-operative sentiment continued to grow and 
enlarge. 

Early in 1887, having heard of the Rochdale sys- 
tem of co-operation in Great Britain, I wrote for such 
printed, matter as they had for distribution, and in 
response received a generous supply of pamphlets, an- 
nual reports, addresses, etc., which I distributed among 
our workers and other interested parties. 

These treated co-operation from a new angle — 
the ultimate consumer — and broadened our vision. 

Co-operative elevators and flat warehouses had in- 
creased under very great difficulties, especially from 
the Line Houses, that is, the regular grain corpora- 
tions with headquarters in Minneapolis and Duluth. 
It became very plain that they were not conducted in 
the interest of the producer, and that a second step 




24 DEVELOPMENT OF CO-OPERATION 

was necessary for our co-operative farmers, viz. : a 
representative to handle their consignments at the 
terminal markets. 

LOOKING FOR AN AGENT— FIND AN INDEPEND- 
ENT BUYER. 

In the meantime, through "Wiley Neilson, of Val- 
ley City, who had been making a study of the British 
milling situation, and was a subscriber for the London 
Miller their official organ, I became more interested 
in the idea of reaching the British miller. 

Another factor that was receiving considerable at- 
tention, was a few independent warehouses going up in 
Minnesota and Dakota, by a Minneapolis concern. C'.C. 
Walcott & Co., and buying in opposition to the reg- 
ular houses. In every case the competition resulted in 
a lively market and higher prices. 

Of course, it was natural that we should encour- 
age such competition. 

The farmer received the higher price, without tak- 
ing any risk. 

During the winter of 1888 I concluded to go to 
Minneapolis to investigate not only this independent 
buying proposition, but the securing of an agent to 
handle independent shipments of individual Alliance 
men, and co-operative shippers. 

Rev. A. D. Chase — Father Chase — our state lec- 
turer, whose son-in-law was a buyer at one of those 
independent warehouses at Groton, was very enthusi- 
astic over the great work they were doing for the 
farmers in the way of competition, and I invited him to 
go with me. 

Naturally the first man we called on ivas C. C. 
Wolcott, the head of the firm, whose office was in the 
Chamber of Commerce, on the Chamber floor, rooms 
38-39. lie certainly appealed to us as a friend of "au 
open market" and was quite anxious to co-operate 
with us. 



COOPERATE WITHBBITISH MILLERS 25 

THE NEXT STEP— A CO-OPERATIVE ELEVATOR 
AT MINNEAPOLIS PROJECTED. 

When I outlined our general plan of a terminal 
elevator, he became more enthusiastic, and offered to 
go in Avith us. it; we would incorporate and appeal 
to our farmers to take stock, and otherwise patronize 
the new association. He had, as I remember it, around 
30 warehouses and elevators, and at every point kept 
a lively, competitive market. 

I submitted the proposition to our Executive Com- 
mittee and they cordially approved. I went back to 
complete the arrangement for organization, during 
the meeting of the Minnesota Alliance at St. Paul, and 
on their invitation addressed them and outlined our 
plan, and requested their co-operation. A delegation 
came over to Minneapolis to meet with us. F. B. Fan- 
eher. our Vice President, was present. The result 
of the meeting was an agreement to organize a co- 
operative elevator company, and the following board 
of directors was chosen: H. L. Loucks, President; F. B. 
Fancher, Vice President ; Eric Olson, Secretary of the 
Minnesota Alliance, and Haldor E. Boen. (later elected 
to congress ), to represent the Minnesota Alliance, and 
C. C. Wolcott, ^Secretary and Business Manager. 

We were not to engage in business until the first 
of the following August. By that time Mr. Wolcott 
would have his annual clean-up, and would turn his 
business over to us. 

It must be remembered that at that time our farm- 
ers were not in such a good financial position as they 
are today. But with the business of Mr. Wolcott tc 
start with, the prospects looked bright, so Mr. Fan- 
cher and I returned to Dakota to work and left Messrs 
Olson. Boen and Wolcott to complete the work of or 
ganization and incorporation. 

THE BRITISH MILLERS TO BE OUR NEXT GOAL. 

Soon thereafter I received a letter from Mr. Niel- 
son, advising me that at his request in the London 



26 DEVELOPMENT OF CO-OPERATION 

Miller, the British millers had sent a representative 
to look into our wheat business with a view of direct 
shipping connections, and urged rue to meet Mr. St. 
George in Chicago to talk matters over. This I did 
and he was very much pleased with our program. 

Then, for the first time. I learned that there was 
a very great difference between our No. 1 Northern 
wheat as we sold it and as it was delivered to the 
British millers, and that they would be glad to pay an 
increased price for the pure No. 1 Northern, as grown 
by us. 

This was an entirely new development to me, and 
I naturally asked then, why not ship our wheat direct 
to your millers. That was just what they wanted, so 
the* result of our conference was to recommend a 
change in our program, and incorporate as an inter- 
national corporation; a union of the Dakota and Min- 
nesota wheat growers and the British millers, each 
to subscribe one-half the stock; with a dual board of 
directors, and they to build a receiving elevator at 
Liverpool. 

Mr. St. George returned at once to England and in 
due course advised us that the London Miller had ap- 
proved, and that the proposition was meeting with such 
favor that he was sanguine that it would go through. 

We changed our plans accordingly, and were 
making good progress. 

We had the promise of an elevator in St. Paul. 
payment to be taken in stock. Governor Merriam had 
become very much interested. "We also had nearly com- 
pleted a similar deal in Buffalo. 

In Minneapolis we had secured an elevator site. 
and the lumber had been contracted for, and part of 
it was on the ground. 

Mr. St. George had advised us that the millers 
were to have their annual meeting early in July, and 
concluded that it would be better to wait for that, so 
as to give the movement official recognition. 

In May, therefore, the deal promised clear sail- 
ing. However we thought it better that Mr. Wolcott 



shoi 



A CONSPIRACY DEVELOPED 27 



should go over for the British millers' meeting, and 
especially as it was the custom for the Minneapolis 
grain men to be represented. 

I had expected to give my time almost wholly to 
South Dakota, Fancher to North Dakota, and Olson 
and Boen to Minnesota, soliciting stock and shipments. 

A CONSPIRACY DEVELOPS. 

I was advised later that an organization was per- 
f cted and $100,000 raised, or guaranteed, to "run m. 
out of business." 

A very unfortunate circumstance gave them a great 
opportunity. 

A young man by the name of Doty came out from 
Pennsylvania, ambitious to learn the grain business, 
and had some money to invest. The brothers were 
bankers back home. Mr. AVolcott, learning of his 
mission, advised him of what we were organizing for 
and got him interested. They proposed to take him in. 
and make him Treasurer, provided that fhe would 
take $40,000 in stock. This he agreed to do and sub- 
scribed for that amount, to be paid in August 1st 
The directors approved of his selection as Treasurer. 
In the meantime, Mr. AVolcott, ' having his large grain 
interests to be taken care of and wound up before Aug- 
ust 1st, when he was to turn his businses over to us, 
took Mr. Doty into his office to wind up his business. 
With that we had absolutelv nothing to do. There 
were obligations to be met, and grain in the elevators 
to be shipped, a general clean-up to be made, and it 
appeared that Mr. AVolcott had borrowed some money 
from Mr. Doty, giving him security on grain in store. 
and a power of attorney to transact all necessary 
business for him. 

This Doty was a nervous little fellow, and , our 
enemies on the Chamber of Commerce .learning- of hi? 
connection with AVolcott and us, concluded to use him 
to bankrupt AVolcott and smash us. 

The ingenuity and efficiency of their plans demon- 
strated their business ability. On fixing a certain date 



28 DEVELOPMENT OF CO-OPERATION 

timed to just precede the annual meeting of the British 
Millers Association in London. 

Doty, under the plea that he was afraid that there 
was not sufficient grain in Wolcott 's elevators to repay 
him, was to suddenly and without warning to Wolcott, 
attach everything in sight, even attaching his lands ir 
North Dakota, and making it appear that he was i 
bankrupt, which later proved to be very far from the 
truth. 

"We had a— ^nted George Wilson, a young ste- 
nographer in "Wolcott 's office, our Assistant Secretary 
and entrusted him especially to look after such cor- 
respondence as might come in during Mr. Wolcott V 
absence. Fortunately for us, he proved to be an able 
loyal, honest young man. 

The attaching of Wolcott 's property was not con- 
sidered sufficient to "smash" us. Some one, more 
clever than Doty, must have conceived the idea of in 
eluding us in the deal, with which we had nothing to 
do. 

Doty took a block of our best stock notes and 
sent them to their bank in Pennsylvania, hypotheti- 
cating them for a loan of $10,000. 

This, without consulting with me, or any of the 
directors. 

We had no use for the money. We were not In 
business. 

It was placed to Wolcott 's credit, on the theory 
that we owed Wolcott. which was not true, and then 
as Wolcott 's attorney checked back to Doty . He sueo 
Wolcott for a considerable amount in our name, and 
mixed us up apparently hopelessly with Wolcott 's af- 
fairs, and the report was given out to the press that 
both our elevator company and Wolcott had gone bank- 
rupt, and the news cabled to the London Miller. 

That, of course, ended the millers' side of the 
combination. 

I was addressing an Alliance picnic at Frederick, 
when I received a wire from faithful Wilson to come 
atonce to Minneapolis. I had promised to be home for 



FAITHFUL, LOYAL WILSON 29 

Sunday and could not think of anything pressing in 
Minneapolis, and concluded to go home, and to Minne 
apolis on Monday. Arriving- at Clear Lake, I received 
another more pressing wire, "Business matter serious; 

come at once." 1 took the next train out. 

Arriving in Minneapolis, I found things as stated. 
Wolcott's business in the hands of a man who was 

doing his best to ruin him financially, and our affairs 
in the worst shape possible. 

All strangers to me; finances all tied up; property 
attached for debts we did not owe; the young man 
AVilson the only one I could trust. 

There were just two things to do : the prudent 
business one to throw up the whole business and accep' 
the personal losses; or the other to nrotect the good 
name of the Alliance, and throw my whole personal 
into the scale ; sit right down in Minneapolis 
and fight the conspiracy to a finish. Without a mo- 
ment's hesitation I accepted the latter. 

I was exceedingly fortunate in securing Geo. H. 
"White as an attorney, and we were cleared of all the 
legal Wolcott complications. 

Our enemies in the Chamber of Commerce, as 
well as our enemies in the country, of course, did aL 
they could to blast our financial reputation, and many 
friends were deterred from shipping to us by railroad 
agents, and by the local bankers, besides not being 
a member of the Chamber of Commerce, we had to 
have a member look after our business on the Cham- 
ber floor, and according to the rules we had to divide 
the commission with them. We were fortunate in 
securing Woodward & Co. as our agent. 

BUYING A MEMBERSHIP IN CHAMBER OF COM- 
MERCE, AND HAVING AN OFFICE IN THE 
BUILDING DID NOT GIVE ANY BUSI- 
NESS PRIVILEGE. 

We still continued to occupy rooms 38 and 39 
on the Chamber floor. 

Supposing that the Chamber of Commerce was an 




30 DEVELOPMENT OF CO-OPERATION 

ordinary incorporated association, organized for the 
special purpose of aiding the farmers, and all that I 
had to do was to buy a membership. I bought mem- 
berships in both the Minneapolis Chamber of Com- 
merce and the Dnlirth Board of Trade. I soon found 
that that was not enough; that I had to make an appli- 
cation vouched for by two members in good standing 
then pass the second and third degrees, and be posted 
in the Chamber to be voted on, on a certain day. I 
had not been given a hint but that all was going 
right, but the line elevator group had been busy, and 
soon the black balls had been exhausted, but this did 
not satisfy the group and they insisted on the clerk. 
who was very friendly with me. sending out and get- 
ting a new lot of black balls, so that I had the dis- 
tinguished honor of having more black balls cast 
against me than any man. before or since. 

I heard an unusual uproar in the Chamber, and 
sent one of the clerks in to see what great event had 
so stirred that group of business men. and was in- 
formed that they were celebrating my rejection. "When 
asked why. the reason given was that they did not 
want that damned Farmers Aliiance represented in the 
Chamber. Now they were done with them. 

BLACKBALLED: WEARS BLACKBALL AS BADGE 
OF HONOR. 

I asked our superintendent, who had access to the 
floor, to go in to secure one of those black balls. He 
hesitated, and wanted to know why I wanted it. and 
how I expected him to get it. I advised him that they 
had many more black balls now than they would ever 
want again and. as they were bought for me. I thought 
that I was entitled to one. even if he had to steal it. 
He soon returned with one of the identical black balls, 
and I promptly adjourned to a jeweler's, and had it 
nicely encased in bands duly engraved "Minneapolis 
Chamber of Commerce,'' with the date, with a small 
chain to attach to my watch guard — I really did have 



BLACKBALLED BY CHAMBER COMMERCE 31 

a gold watch chain, then; a birthday present from 
employes on our Missouri River Steamboat a few years 
before — I attached the black ball, as a charm, and ex- 
hibited it as a badge of honor, earned as the official 
representative of the organized farmers of Dakota. 

Several members called to apologize for the ac- 
tion, and they were sincere. 

There was none 1 appreciated more than a call 
the day after by Chas. A. Pillsbury, whom I had never 
met, and who had just returned from Europe, and did 
not know what was up, until it was all over, and he 
expressed himself in very vigorous language over what 
he called an outrage. Said that it was the first time 
that he ever knew that a man had to have a Sunday 
School certificate to be admitted as a member. 

A couple of weeks later he called again to advise 
me that he had canvassed the Chamber, and assured 
me that if I made another application I would be 
elected, and that he and A .J. Sawyer would sign my 
application. Of course, I appreciated the courtesy, 
but told him that I was still president of the Dakota 
Farmers Alliance, and as it was the Alliance that was 
aimed at, I did not feel like making another application. 
I had also learned that the rules prohibited any 
division of commissions or profits with a non-member. 
To do so would make a member liable to expul- 
sion ; to fail to do so would defeat the object of our 
co-operative effort. 

On the same day I was admitted to the Duluth 
Board of Trade by a clear ballot. 

That it was not a personal matter was clearly 
demonstrated by the voluntary offer of two of the 
most prominent members, and the assurance by them 
that they expressed the sentiment of many more. 

As previously stated I had put my own credit 
back of the company and was gradually increasing our 
business. I had opened an account with the National 
Bank of Commerce. I had met Mr. Raymond, the 
President, at Bismarck in 1887. I think that }ie was 
Territorial Treasurer then, and having been asked for a 



DEVELOPMENT OF CO-OPERATION 

ence, I called on him, and lie kindly gave me a 
letter of which this is a copy: 

National Bank of Commerce. 

Minneapolis. Minn.. March 8. 1889. 
To Whom It May Concern: 

The Skandinavian Elevator Co.. one of onr deposit- 
ors, have done business with us for over six months. 
The business has been under the entire charge of H. L. 
Loucks, its President. 

Their account with us has been very satisfactory, 
they keeping a good balance at all times, and so far 
have not borrowed any money of us. 

Mr. Loucks is President of The Farmers Alliance 
of Dakota, and so far as I know has the entire confi- 
dence of the association, and all its members. 

Their elevators are in good localities, and should 
make money, as elevator stock in the northwest pays 
from fifteen to forty per cent, on the investment. 

Respectfully, 
Signed J. W. Raymond. 

It will be noted that I had the opportunity of 
securing much information at first hand. 

THE PROFIT OF MIXING GRAIN IN TRANSIT. 

I had been advised that the quality and value 
of our wheat delivered in Liverpool was very much 
lower than the Minneapolis grades and values, and to 
test this. I sent a good sized sample of Xo. 1 Northern. 
just as taken from the tables, and sent it to the London 
Miller with request that they carefully compare with 
the average sample of No. 1 Northern as received there, 
and advise me as to the difference in value, if any. 

I also requested them to send me a sample of our 
No. 1 Northern as sold on their market. In due course 
I received a reply: that they had submitted the sam- 
ple to several leading millers, and that they said that 
they would pay 15 cents per bushel more for such 
wheat. No. 1 Northern, than the quality they were 
receiving. AVhen I received the sample from them ,1 
sent it to the official inspector .and he graded it No. 3. 



PROFIT OF MIXING WHEAT IX TRANSIT 33 

The price we received for our wheat in our pri- 
mary market was based on the price in Liverpool, less 
rest of transportation and handling. 

In my annual address to the Alliance in L888 I 
gave as the profits that might be eliminated by co-opera- 
tion from producer to consumer as 25 cents per bushel, 
and the figures were never challenged. Here, how- 
ever, was another fifteen cents that 1 had not counted 
in. This made forty cents per bushel that our farmers 
should have had, that went outside the Territory, to 
build up other states, but with wheat selling- around 
sixty cents per bushel. That seemed incredible, so I 
continued to talk 25 cents per bushel only, and even 
that seemed too large. 

ANOTHER OBSTACLE DEVELOPED. 

After receipt of that letter from the London Mil- 
ler, it occurred to me to try a shipment of a boat 
load of No. 1 Northern wheat — 8,000 bushels — direct 
to a British miller recommended by the London Miller. 
The Bank of Commerce agreed to finance it . Of course. 
it was necessary that it should go through without any 
opportunity of mixing on the way. This would require 
that the cars should go through to the dock in New 
York without trans-shipment. And right here I founc 
another insurmountable obstacle because of the close 
community of interests of the several factors in oui 
grain exchange system. 

The railroads would not permit their cars to go 
through. 

At each railroad terminal, the w^heat must go intc 
an elevator . Apparently the grading is more liberal 
as the wheat approaches Liverpool. 

It goes into each elevator a strong grade, and goes 
out a ' ' skin grade. ' ' They have their 'expert ' ' doctors ' ' 
who can mix it to an outgoing- "skin grade" at a very 
small expense, which in the aggregate amounts to fif- 
teen or twenty cents per bushel. 

Of this science and profit of "mixing," we will 
later give an example as practiced in 1918. They 



34 DEVELOPMENT OF CO-OPERATION 

have grown more expert and efficient. 

It was for this reason that we got a Buffalo firm 
interested as one of the links in the chain from Duluth 
to New York. 

My experience convinced me more than ever that 
the Minneapolis Chamberof Commerce was in no sense 
or function a farmers' organization . 

It was organized by a group of grain dealers, who 
neither produced or aided in the production of grain 
and whose sole aim was profits. 

They secured a special legislative charter, the most 
perfect piece of state legislation ever enacted in the 
way of a private monopoly. 

But of that, later. 

It was because of this personal experience that 1 
have insisted that it was a waste of time and energy 
to try to secure a free, open market through *3ie Minne- 
apolis Chamber of Commerce, and kindred organiza- 
tions. That there was nothing short of the state that 
could compete. 

I have hesitated to give my experience with llie 
Minneapolis Chamber of Commerce, in which I was 5*0 
badly worsted. It is not pleasant to discuss our per- 
sonal financial failures. But after thirty years of effort 
to regulate and control, since then, and numb .-?t] ess co 
operative elevators springing up all ove.* the North- 
west, with state and national associations meeting an- 
nually, and being stalled by this grain exchange monop- 
oly; wi tithe agitation now going on in favor of public 
ownership of such public utilities, am I justified in 
withholding my experience any longer, especially ir it 
will he~p solve th- problem? 

Thirty years anro, comparative 1 y few of our farm- 
ers could invest in such enterprises. But our proposi- 
tion was one that appealed to good business men, both 
here and in England. Had it not been for the unfair 
tactics employed + o discredit us, I believe that it 
would have succeeded as a commercial enterprise for 
those financially interested. 

By my personal credit and efforts we keot it 



CRITICAL ILLNESS 35 

afloat in a small way for two years, bat so long as 
there were doubts about its; success I would n t ask 
for .stock subscriptions . My health had been failing 
for years, owing :o a diseased limb, and blood poison- 
ing, and the strain of the l&l'O campaign, whlcti 1 tried 
to avoid, left me a physical wreck. 

There was nothing for it but to go on the sur- 
geon's table, or leave my work unfinished hv.d I de- 
cided on the former. As thr; result was very uncertain 
it was only prudent that I t-hould wind up my busi- 
ness aifairs, so I caHed a meeting of our directors, Ave 
still had our office in the Chamber Building, and were 
paying expenses, and advised them that I must: retire 
at once and some one else take charge. They were all 
in other business, >\ud after full consultation with our 
attorney, Geo. II. AYhite, it was decided to wind up 
the busmess as som as it cculd be done. Mr. White 
was a --pointed receiver, all obligation;: except mine 
were paid ,and that was the last of that effort to 
secure on open, free market through our present sys- 
tem of grain exchanges. 

There has been no change in their po'iey, unless 
it is that they have become more arrogant in their 
power, as is the custom with private monopoly. 



PART TWO. 

The Present Grain Exchange 
System. 

T ) deal with, the grain exchange system, at this 
time, under present abnormal conditions, might be 
ir. 
Fortunately, or unfortunately, I discussed this 
problem five years ago in a series of articles, which 
were published in a number of daily and weekly pa- 
pers, west as far as the state of Washington, and east 
Pennsylvania. I will quote in part from those 
article 

ui ^:ate Grain Dealers Association is a union of 
our farmers' primary co-operative associations. and at 
their annual session in 1914. they adopted the fol- 
lowing i solution: "That in view of the great loss t( 
lers I — e various terminal elevators, that we 
should continue our efforts to secure the erection of 
una! "levators with iew of doing our own ter- 
ting and exj : tb _ 3 is now being done 
the farmers of Canada, and we condemn gambling 
in futures as to phantom grain, as it is well known 
that such gambling fixes to a very great extent the 
sh grain.'* 
organization is composed of the very best, 
st intelligent, and prosperous farmers in the state. 

THE AKGUS-LEADER TAKES ISSUE. 
The Argus-Leader, one of the ablest opponents 
■ nership and operation of public utili- 
tely tc k issue, in its usual forceful, per- 
sistent manner, and in this case was ably assisted by one 
of the students 73 : thi system, representing 

f the leading grain exchange houses of Chi _ 
I am not a member of the organzation. and not 
ly interested in any co-operative movement, 



OPTION TRADING 37 

but 1 still believe in the principles and policies of the 
good old Farmers Aliiance, and when they are at- 
tacked, somehow I could not let it go unchallenged. I 

quote the editorial, in part: 

"Fourth. The speculative or insurance merchant, 
through whom cash grain handlers insure the value 
ofthe commodities in hand and from whom speculators 
buy these future delivery (insurance) contracts. 

'"It is the misfortune of this fourth department 
that it is so little understood . It is this department 
(option trading) that is the center of attack, not by 
intelligence, but rather by a restless ignorance cloaked 
in the false guise of reform. It is this department that 
makes possible the even, harmonious distribution of 
grain under any and all circumstances, that makes pos- 
sible the existing method of handling grain. It is 
this department that absolutely prevents the monopoly 
of the grain business by any man or group of men; 
and who, under any other system than that of open 
markets would soon have the grain business of the 
United States within their grasp as securely and abso- 
lutely as they now have numerous other lines of busi- 
ness. ' ' 

To this I answered, in part, as follows in my first 
article : 

"It is the misfortune of this fourth department 
that it is so little understood. It is the department that 
is the center of attack, not by intelligence, but rather 
by a restless ignorance cloaked in the false guise of 
reform." That paragraph surprised me. It did not 
breathe the spirit ,or express the style of the genial 
Charley Day, who is one of the fairest writers in the/ 
state. It is the sentiment of arrogant private monop- 
oly, clothed, in the familiar style of Mr. McITugh, the 
secretary of the Minneapolis Chamber of Commerce. 

"My work is voluntary and at my own expense; 
believing as I do that the remedy and policy outlined 
would go a long way towards the conservation of the 
resources of South Dakota, instead of for the specu- 
lators and gamblers at the terminal markets. I am glad 






38 PRESENT GRAIN EXCHANGE SYSTEM 

to be able to give my time and experience to encour- 
age better marketing in the interest of both the pro- 
ducer and consumer, and I am not at all discouraged ; 
nor will the organized farmers be by the assertion ot 
private monopoly that the foregoing resolution is 'not 
b- intelligence, but rather by a restless ignorance 
cloaked in the false guise of reform.' 

"Let both sides be heard, and let the readers 
judge." 

The following is from the same editorial, and 
claims more benefits from the present system than I 
have ever seen before, so quote the best possible from 
that side : 

"The superiority of our methods of handling the 
immense farm surpluses of grain and cotton lies in the 
fact that the speculator relieves the producers of the 
burden of watching to know whether the world will 
have a little surplus, or a little deficiency and of estab- 
lishing a central price at which every one interested, 
however great or small, can insure the value of grain 
or needed supplies. From this result : First, in estab- 
lishing the business of grain handlers on a basis of a 
trade profit. These middlemen, therefore, do not rely 
on value fluctuations for their profits; their income 
depends upon the quantity of grain handled. Second, 
it enables owners of grain to borrow 90 or more per 
cent, of the insured value of their grain. Third, it fos- 
ters keen competition in buying and equally keen com- 
petition in the selling of grain or grain products. 
Fourth, having removed the business of the grain 
handlers and millers as far as possible from the realm 
of uncertainty and risk, this system enables the hand- 
ling of grain on the narrowest margin of profit secured 
by middlemen in any other line of business in this 
country, if not in the world. 

"One who attempts to tear to pieces a method of 
handling the tremendous grain crops in this country 
on the above basis without offering a better substitute 
deserves no recognition whatsoever from an intelligent 
and fair-minded people." 




INSURING PRICES 39 



The iteration and reiteration of these many spe- 
cious, misstatements of facts, and the stating of half 
truths by the special associate editor has, I fear, almost 
if not quite persuaded the editor to believe : First, that 
the present grain exchange system ,is really beneficial 
to the farmer, and second, that we have never offered 
a "better substitute." 

It will be noted that the writer concludes as he 
began the editorial, with an attempt to prejudice the 
reader by the claim that we who favor substituting a 
"free and open market" for the present system, are 
doing so "'not by intelligence, but rather by a restless 
ignorance cloaked in the false guise of reform." And 
closes with "deserves no recognition whatsoever from 
an intelligent and fair-minded people." 

INSURING PRICES. 

"The grain exchange is as much of a necessity as 
fire insurance. Trading in futures is in fact price in- 
surance." 

"The farmers of the state might as well try to 
get through without railroads as without price insur- 
ance which is the big function of the grain exchange. ' ' 

Now that the Argus-Leader affirms that "trading 
in futures is in fact price insurance; which is th< 
big functions of the grain exchange," it simplifies the 
discussion. 

The resolution of the State Grain Dealers' Associa- 
tion did not advocate the elimination of grain ex- 
changes. They said: "We should continue our efforts 
to secure grain exchanges and terminal elevators with 
a view of doing our own terminal marketing and ex- 
porting, as is now being done by the farmers of Can- 
ada." 

Then they add: "We condemn gambling in f 1 
tures as to phantom grain, as it is well known that 
such gambling fixes to a very large extent the price 
of cash grain." 

I answered this in part at the time as follows : 

Any question affecting the marketing of farm prod- 



40 PRESENT GRAIN EXCHANGE SYSTEM 

nets, while primarily a farmers' problem, is a state 
and national problem, affecting every legitimate indus- 
try in stateand nation, and they should be considered 
as such. We will admit for the sake of argument that 
the farmers are too busy; or too prosperous — or think 
they are — to give the attention they should, as all other 
industries do, to the marketing of their own products. 
A fair question to ask is: have the several boards of 
trade and chambers of commerce, responsible for this 
' ' valuable modern device ' ' been organized by the farm- 
ers, and operated as such? 

I know of no one who advocates the abolition of 
the grain exchanges. The farmers demand is to elim- 
inate the evil practices complained of, or failing in 
that, to organize new associations of their own to 
complete the marketing of their products. 

The objection is to the selling of options for many 
times as much grain as is produced, by those who 
neither produce, own, expect to own ,or intend to 
deliver a bushel. It is simply speculation on their 
part in hopes of gain .without the slightest thought or 
care for those who produce or own the grain, or the 
effect it may have on the consumer. 

I wish to add now, with the strongest possible 
emphasis, that it is because of this "invaluable modern 
device" that the price of some farm products are so 
utterly unstable. 

In no other industry in the United States, or any 
other country do they use, permit, or tolerate the 
use of such an "invaluable modern device", and in no 
case do we find such frequent, yes even daily fluctua- 
tions in prices. 

In no other case I knoAv of, or ever heard of, 
do they offer to sell for future delivery for less than 
present cash prices. 

Again, and which should be conclusive, there is 
not a single farm product that is subject to these daily, 
sudden and violent fluctuations in price except those 
few subject to control by this "invaluable modern 
device." 



THE GOVERNOR OF AX ENGINE (?) 41 

Finally, it' any further fact were needed that the 
farmers themselves do not believe in such insurance, it 
is that not one in 100.0(H) lias ever taken advantage of 
it to sell his actual prospective crop, before seeding, 
or even before harvest, much less to sell an option, if in 
Minneapolis, tor one hundred times as much, or if in 
Chicago, for 300 times as much as he expected to pro- 
duce. 

GOVERNOR OF AN ENGINE. STEADIES PRICES? 

"They (the speculators) balance, like the gover- 
nor of an engine, the otherwise erratic course of prices. 
They tend to steady the market more nearly to its right 
level than if left to chance and unhindered manipula- 
tion." 

Now, for the hard facts we look to their market 
report page and I wish that for one year every farmer 
would take the pains to cut out the market report 
daily and paste in a scrap book, just to study the rea- 
sons ( ?) given for their wild, erratic, sudden changes 
in "insuring of the price of grain.' 1 

Feb. 3, 1915. In the wildest, most sensational mar- 
ket in its history, the Minneapolis Chamber of Com- 
merce today witnessed the unprecedented movement 
in wheat price of 8 cents in five minutes. 

The movement was a break from a new crop and 
16-year record. It followed an extraordinary bull 
movement, in which the price for May wheat was 
boosted vdthin three minutes after the opening of the 
the market to $1.57, 3 3-8 cents over the crop record 
made yesterday. 

The market opened with the bulls in complete con- 
trol. Whenthe starting gong rang the Winnipeg wires 
were ticking out new T s of advanced prices in Liverpool 
and of enormous export demand. The Chicago wires 
were down. 

Two traders shouted the first bid at once. One 
cried $1.50 for May wheat, the other offered $1.56%. 
The next bid was above the latter mark and the big 




41 PRESENT GRAIN EXCHANGE SYSTEM 

clock indicator moved up an eighth of a cent at a time 
until $1.57 was touched. 

Traders were predicting $1.60 before the close of 
the day, when the Chicago wires were opened and the 
nightmare began. The Chicago wires carried stories 
of allied fleets crushing the forts at the Dardanelles 
and of the crash in the Chicago market, where wheat 
opened 3 cents below yesterday's close. 

The Minneapolis traders suddenly awakened to 
the fact that they were relatively 7 to 8 cents above the 
Chicago Market. 

Consternation ruled. Sale orders came so thick 
and fast that the downward course was expressed ir 
jumps of a cent at a time. Seldom was a split cent 
bid. 

Chaos reigned. There was a riotous quarter of an 
hour in which the pit was a thing seethingly wild. 
The traders were like madmen at bay. In a little less 
than five minutes the price of May had dropped from 
$1.57 to $1.49. 

Recovery was rapid. The shorts made a scurry 
to cover and flooded the market with buying orders. 
At the sametime very bullish reports concerning the 
cash market poured in over the wires. In another 
hour the price had climbed to $1.53 and the pit was nor- 
mal again. 

March 4th, 1915, head lines. "Wheat Takes Wild 
Plunge." 

"Jftumored war orders cancelled. Confirmation of 
the reports lacking and market broke 7 1-2 cents a 
bushel under last night." 

Dec. 28th, 1915: "General selling by commission 
houses today pulled down the price of wheat. The 
selling was largely to close up accounts for the end 
of the year." "Corn sagged with wheat." 

Dec. 27th: "Profit taking by holders more than 
wiped out an advance today in the wheat market." 

Jan. 14th: "Rumors that a fresh advance in 
freight rates to Europe most likely, had a bearish 
effect today on wheat." 




AN ERRATIC "GOVERNOR" 43 



Same report: "Later wheat suffered a further 
drop owing to reports that a bill to remove the duty 
on wheat had been introduced at Ottawa." 

The passage of the bill automatical^ placed wheat 
on the free list here in accord with our tariff law, and 
our wheat promptly dropped nine cents per bushel. 

We skip to 1917. Beginning with March 1, 1917. 
when very little could be known of the winter wheat 
prospects, and the spring wheat was not sown, we find 
that these expert speculating protectors and guardians 
voluntarily, and without expense to the wheat grow- 
ers, began insuring the value of the 1917 wheat crop. 
The balance of the 1916 wheat for sale was nearly all 
under their control. 

March 2 cash wheat dropped two cents per bushel. 
What was the reason? "Snow and rain in the South- 
west. 5 " Snow in midwinter! Don't laugh! The ex- 
perts had to have some reason. 

March 3: "Only a transient setback in values 
resulted from reports of heavy snowfalls in Kansas and 
the prospect of arming American ships," and cash 
wheat jumped to $2.04, an increase of nine cents ; 
May to $1.91, an increase of six cents; July to $1.83. 
and September to $1|.50. The wheat they controlled 
gained nine cents; the wheat the farmer had to grow 
only two cents. 

March 5: "The ship arming bill was defeated, 
but it made no material difference. Then that factoi 
can be eliminated for the 3rd, which would make the 
snow storm in Kansas alone responsible for the boost. 

March 6. Contradictory rumors caused a fluctua- 
tion of 4 cents, a net advance of cash wheat of 2 cents. 

March 7. "Market weak because of realizing 
selling by holders and snows in the "West, September 
selling down to $1.49." 

March 8. On several rumors in re shipping the 
market was weak, but owing to "bullish reports from 
West and Southwest led afterward to an upturn in 
values." More snow in Kansas, in all probability. 



44 PRESENT GRAIN EXCHANGE SYSTEM 

March 10. Many rumors with slight changes un- 
til it was reported that there was a "severe wind and 
dust storm in Kansas resulted later in a pronounced 
advance."' Kansas is the only state in the Union where 
a dust storm could follow a snow storm so closely 
and damage a wheat crop in early March. 

March 12. Kansas again. "Later, however, word 
of rain in Kansas caused the market to give way in a 
more decisive manner. Snow in Nebraska added to 
bearish sentiment." "'The close was semi-demoraliz- 
ing." 

A lively market with fluctuations of 6 1-2 cents. 
Cash wheat dropped to $1.99: May to $1.82. and July 
to $1.75. Charge that to Nebraska. 

March 13. Many contradictory rumors making a 
lively market. "Selling was general, but buying was 
lacking. " ' Just how they could sell without buyers is 
a grain exchange trick, and they won't tell. But the 
net result was a decline of cash wheat to $1.93, May to 
$1.81, July to $1.74. and September to $1.45. The mar- 
gin between cash and September remaining at 48 cents. 

It requires rapid changes in price to make a lively 
market, and a lively market is the speculators" har~ rest 
When all other rumors fail they fall back on poor, er- 
ratic , eccentric Kansas. 

Twenty-five years ago they would have said that 
Kansas Populism was to blame. 

And that is a sample of value insurance, under 
the present system. 

SELLING FUTURES DEPRESSES PRICES. 

Jan.. 1914: "Where there is a buyer, there is 
also a seller. Hence it is that over a long period of 
time it is found that the speculative price follows with 
astonishing fidelity the actual cash price fixed in ear- 
lier market movements.'" That is in the sale of fu- 
tures, or options. 

•t. 17. 1914: "The bears, to accomplish any- 
thing lasting, must have the help of hedging sales."" 



SELLING FUTURES DEPRESSES PRICES 45 

Note. — That is, the Selling of options for future 
delivery of a sufficient amount of "phantom'' wheat to 
force prices down as low as possible. 

That is the function of the "bear." 

July 1, 1915: "The buying of food and food- 
stuffs for several belligerents of Europe is centralized 
in the hands of a bunch of Wall street financiers. The 
latter have the art of deceiving the American public 
well in hand. They can afford to depress the grain 
value barometers while they accumulate the actual 
grains. Illustration — Chicago July wheat delivery con- 
tracts call for No. 2 red or No. 2 hard winter wheat. 
Bids to the country for these grades of wheat range 
18 to 20 cents per bushel over the price of July con- 
tracts. The July wheat contract value closed at 
$1.06 5-8 yesterday. No. 2 red wheat in cash market 
closed $1.26 1-2 to $1.28. No 2 hard at $1.28 1-2. De- 
pressing the futures (barometers) enables the buying 
of cash wheat somewhat cheaper." 

Tn this case it was just twenty cents per bushel, 
cheaper, and just in time to catch the winter wheat 
crop, which partly escapes the annual decline in au- 
tumn. But: "the producer is thus put in touch with 
information of great commercial value to him. 

No ; that Avas not intended as a joke. The warn- 
ing may have been of value in warning the farmer 
to curtail his planned expenses for the year, based 
on the price when seeding, but we all got used to that 
after we had suffered a few times from similar "in- 
formation. ! ' 

But, the rather encouraging .although surprising, 
part of that editorial is in the first part in which the 
Argus-Leader concedes our position so emphatically. 
to-wit : "The buying of food and foodstuffs for bel- 
ligerents of Europe is centralized in the hands of i 
bunch of Wall Street financiers. The latter have the 
art of deceiving the American public well in hand. 
They can afford to depress the grain value barometer 
while they accumulate the actual grain." 

"While the light holds out to burn," etc. I have 



46 PRESENT GRAIN EXCHANGE SYSTEM 

always believed that the genial editor of the Argus- 
Leader would in time see the light. 

The House of Morgan was the agent of the bellig- 
erents ,the "bunch of Wall Street financiers" referred 
to, and they not only made their profits at the expense 
of our farmers in buying ,but still greater at the 
expense of all our own people — farmers included — as 
well as the belligerents in selling. In this case we 
must concede that selling futures was "an invaluable 
modern device" for the House of Morgan. 

Note also the cunning camouflage. "Cash wheat 
was selling for 20 cents per bushel OVER the price 
of July contracts," instead of July selling for 20 
cents per bushel UNDER cash. 

That "bunch of Wall Street financiers 7 '' were so 
certain of their monopoly of the grain trade that we 
read in the A.-L. market reports of Sept. 17 (Chicago) 
1915, or 1916: "There are only 24,000 bushels cash 
contract wheat in Chicago with No 1 . 2 red selling at a 
premium- over the Sept. of 10 to 12 1-2 cents." 

Tthat is, with only 2,000 bushels of contract 
wheat in store in Chicago they dared to sell many mil- 
lions of bushels of wheat for September delivery for 
10 cents per bushel less than the then market price. 

Now a glance at March, 1917, our last month be- 
fore entering the war. 1917 Annual Report Minne- 
apolis Chamber of Commerce, page 69. No. 1 Nor. 
contract grade, cash sold for $2.00, May $1.85, July 
$1.78, and September $1.48. That is, the farmer could 
have sold his wheat March 1st for $2.00, but by the 
means of this "invaluable modern device" and suf- 
ficient margins (which at one time ran up as high as 
50 cents per bushel), he could have been insured $1.85 
for May delivery — 15 cents per bushel less. 

If he preferred to hold for July delivery he could 
under the "device" have been insured $1.78, or for 
September delivery $1.48 — just 52 cents per bushel 
less. I gave this publicity at the time and asked if 
there was a farmer in the United States who was tak- 
ing advantage of it, but never heard of one. 



14 WALL STREET SELLING FUTURES" 47 

It is the regular custom, seldom changed, that 
prices arc higher in the spring, when the wheat is well 
out of the farmer's hands ,and in elevators of the grain 
handlers, and lower just as the general harvest begins. 
The fair prices in March and April encourage the farm- 
ers to sow more wheat. By harvest time the speculat- 
ors are pretty well cleaned out, and have sold futures 
in advance on one pretext or another for much less. 
and as the Argus-Leader has said "the speculative price 
follows with astonishing fidelity the actual cash price 
fixed in earlier market movements." That is, the sale 
of future, or options. 

Sept. 6, 1915, we read in the A.-L. : "Since early 
in the year wheat values have declined more than 60 
cents per bushel; corn about 25 cents, and oats aboul 
25 cents." Now, don't laugh when you read the rea- 
son given by experts, students, etc. "Without doubt 
much of this decline was due to presidential — pros- 
perity — talk based on fabulous crops and high (?) 
prices." 

What an absurd statement to give an intelligent 
public. 

It was due to those "Wall Street financiers selling 
futures" at lower prices than cash. 

Read carefully the following table taken from the 
Minneapolis Chamber of Commerce Annual Report for 
1917, page 78. 



Highest in 


Lowest in 




Highest Fol- 


Spring 


Autumn 


lowing Spring 


1886 .83 


.67— 


.16 


1887 


*.82— .15 


1887 .82 


.65— 


..17 


1888 


.88— .23 


1888 .88 


.82— 


.06 


1889 


1.11— .37 


1889 $1.11 


.74— 


.37 


1890 


.92— .18 


1890 .92 


.82— 


.10 


1891 


1.12— .30 


1891 $1.12 


.86— 


.26 


1892 


.89— .03 


1892 .89 


.66— 


.23 


1893 


.70— .04 


1893 .70 


.52— 


.18 


1894 


.63— .11 


1894 .63 


.53— 


.10 


1895 


.82— .29 


1895 .82 


.51— 


.31 


1896 


.63— .12 



1895 



1- PRESENT GRAIN EXCHANGE SYSTEM 



1896 


.63 


.51— 


.12 


.1-97 


.76— 


.25 


L8 7 


.76 


.81— 


.05 


1898 


£1.60— 


.79 


1898 


si. 60 


.57 — $ 


1.03 


1899 


.10 — 


.18 




.75 


.66— 


.09 


1900 


.88— 


.22 




.88 


.71— 


.17 


1901 


.75 — 


.04 


1901 


. .5 


.61— 


.14 


1902 


.77 — 


.16 


_ 


.77 


.65— 


.12 


1903 


.88 — 


.23 


1903 


.88 


.77 — 


.11 


1904 


$1.05— 


.28 


1904 


±±.ijo 


$1.03— 


.02 


1905 


$1.28— 


.25 


1 ' 


$1.28 


.78— 


.5m 


1906 


.85— 


.07 


1906 


.85 


.74 — 


.11 


1907 


$1.06— 


.32 


1907 


$1.06 


.95— 


.11 


1908 


$1.11— 


.16 


1908 


$1.11 


$1.00— 


.11 


1900 


$1.38— 


.38 




$1.38 


.97— 


.41 


1910 


$1.17— 


.20 


1910 


81.17 


.99— 


.18 


1911 


$1.03— 


.04 


1911 


$1.03 


.98— 


.05 


1912 


$1.19— 


.21 


1912 


$1.19 


.80— 


.39 


j.913 


.95— 


.15 


1913 


.95 


.81— 


.14 


1914 


.98— 


.17 


1914 


.98 


.93— 


.05 


1915 


$1.66— 


.73 


1915 


$1.66 


.89— 


. i / 


1916 


$1.40— 


.51 


1916 


$L40 


$1.52— 


.12 


1917 


$3.34— $1.82 



*The plus sign should follow each price in tins 
entire eoluinn of figures. 

That official report should convince any intelli- 
gent, fairniinded person of the absolute soundness of 
our contentions. 

It covers the full period since Minnesota inaug- 
urated their inspectoin system. For the 31-year per- 
iod there was just one year in which there was not a 
reduction in price between seed time and harvest, and 
that year the crop was unusually small. 

The reduction in price between seed time and har- 
vest was the toll, or tribute, our farmers paid to one 
of the western subsidiaries of that "bunch of "Wall 
Street financiers*" — our grain exchange system. 

Now. the crop well out of the producer's hands 
and a heavier toll or tribute is collected by the same 
device from the consumers, which, of course, includes 
the farmers. 



WHEAT PRICE FIXING 49 

The annua] average reduction is a fraction over 

21 cents per bushel. 

The average annual increase lias been 28 cents pei 
bushel. 

Avery reasonable expense for carrying for six 
or eight months would *be six cents per bushel. 

But, it means a profit of vastly more than the fig- 
ures given, for the speculators made their profit on 
many times the number of bushels of actual wheat sold, 
which, according to the testimony of experts before 
the Committee on Rules of Congress in 1914 was 300 
times as much in Chicago, and 100 times as much in 
Minneapolis. See report pages 22-57. Is it any won- 
der that the farmers who understand what the sys- 
tem really is are demanding a change. 

It is not to regulate, or control, or reform, but to 
substitute a system of our own. 

It has been demonstrated beyond all question that 
this subsidiary of that "bunch of Wall Street finan- 
ciers' ' control Minnesota politically. It has also been 
demonstrated beyond all question that all appeals to 
congress have been of no avail, and will continue to 
be so. so long as the present Secretary of Agriculture 
remains in the cabinet. 

But, this I am dealing with in a separate pamphlet 
showing the legislative discriminations against agricul- 
ture, more especially during the war period. 

WHEAT PRICE FIXING. 

President AVilson insisted that full power be given 
him to control prices of food. Congress hesitated to 
confer the power wanted to any one man. or even a 
commission. It was finally passed as a war m.eastiVi. 

Of course, it was well known that the president 
intended to appoint Mr. Hoover controller, clothed 
will full powers to administer. 

Of date July 10. 1917, Mr. Hoover, in a report 
to President Wilson said, in part: "I am informed. 
that most of the allied countries have fixed the price 
of wheat to the farmers at $1.80 per bushel, and many 



1 RESENT GRAIN EXCHANGE SYSTEM 

of their producers believe that as allies it is our duty 
to furnish wheat at a price which, delivered to them, 
will not exceed their domestic price, or in other words, 
about $1.50 per bushel in Chicago . 

Of course, the report was made for public eon- 
sumption, and given out as se mi-official It was a de- 
liberate misstatement, made for the purpose of deceiv- 
ing the American people . A frame-up to penalize the 
American farmer. 

Mr. Hoover was not inisinformed. lie knew bet- 
ter, for he had organized, or assisted in organizing the 
allies and neutral nations of Europe as one \r 
before coming over here to organize the United States 
3 one seller, and he eontrol both. 

The Canadian priee to the farmer at that time was 
fixed at $2.4 and the British government was selling 
to the British miller at $1.85 

Had he been as fair as an ally in a great cause 
should have been, he would have advised paying our 
_reed upon by our neighbors and allies to the 
north, viz., .$2.40 per bushel, which I am sure would 
have been satisfactory to our farmers at that time, and 
the difference between $2.10 per bushel, here, and 
|1.85 laid down in Grat Britain should be paid by the 
United States bus a ^. zieral war expense. That would 
have been duplicating the British pol: 

Instead of doing this he deliberately started out to 
place the whole tax, or difference, upon our wheat 
growers alone, as a class, of the difference between 
- : _ ■"■ per bushel, the market price, and $1.50, the price 
at which lie wished to fix it. For a crop of 800,000,000 
bushels, this would have amounted to $1,400,000,000. 
is the price, however, was finally fixed at $2.20 
the difference would have been only $840,000,000. 

Hi- mission was to get wheat at the lowest possi- 
ble price, and like most successful promoters, resorted 
to deception and false statements, and succeeded. 

Our grain exchanges in Minneapolis, Duluth and 
ieago had been very much annoyed with the agi- 
tation of the farmers for an "open, free market," and 



HOOVER'S MISSION CHEAP WHEAT 51 

with a lesser agitation in favor of government owner- 
ship and operation in handling and distributing our 
grain. 

In this government control they thought that they 
saw an opportunity to discredit government ownership, 
or control, by giving the farmers a lesson, and sent 
large delegations to Washington to urge the fixing 
of the price at even less than $1.50 per bushel. 

This was a very raw thing for a system claiming 
to be organized and operated in the interests of the 
farmers, and "without which we could not market 
our crops." 

Failing to get the price fixed at $1.50 or below, 
they helped get it fixed at $2.17 at Minneapolis or 
$1.69 below the cash price in May. 

This should have satisfied them, but no. "With 
much less work to do in handling wheat, they secured 
an increase in commission of more than double, or in- 
stead of one cent per bushel ,they secured 1 per cent, 
on $2.17. 

But .they were not yet saitsfied . Private monop- 
oly never is. 

Mr. Hoover as controller had just one object in 
view — all the wheat possible for the allies and neutral 
nations of Europe at the lowest possible price. He 
was their agent, although clothed by us with auto- 
cratic power. It was a logical thing for him to select 
as his managers men who had been most successful in 
the past in exploiting the farmers on our grain ex- 
changes. 

Mr. Barnes, of Duluth, was easily first choice, and 
his brother-in-law, Mr. Carey, of Minneapolis, second; 
then with A. C. Loring as chief of the milling depart- 
ment, assisted by J. P. Bell. It was a combination hard 
to beat. 

That Mr. Barnes was well qualified for the part 
he was to play as manager was demonstrated when he 
appeared before the price fixing committee as an ad- 
vocate of $1.50 wheat, and stated that he knew where 
there was 500,000,000 bushels of wheat that could be 



52 MINNEAPOLIS THE BOXERS' PARADISE 

had for $1.00 per bushel. ^Tien asked where, he at 
refused to answer, but on being pressed said Ar- 
gentina. In the monthly bulletin of the Department of 
Agriculture we find that their 1916-17 total wheat crop 
was only 83,000,000 bushels, while their normal de- 
mand for home use was around 100 000,000 bushels. 

It was a crude Board of Trade bluff, using Argen- 
tina as the bogey man just as they are doing now daily 
to force the price of corn down. 

Tothis combination we must add David F. Hous- 
:.. Secretary of Agriculture. It is very unfortunate, 
indeed, that agriculture has not had a representative 
in the president's cabinet for the past six years. 

The new conditions gave an opportunity for a new 
system of grading wheat that would penalize the farin- 
nd enrich the grain handlers to an extent never 
before dreamed of by grain dealers. 

MINNEAPOLIS THE MIXERS' PARADISE. 

Bepresentative Steenerson of Minnesota in disc vis- 
ing this in Congress September 1, 1918 ,said in part, 
see Congressional Kecord. page 11498: 

* The result was that the elevators of Minneapolis 
became the paradise of the mixer, and he could make 
sometimes $100, and sometimes $200, on one carload 

imply mixing two together. 

"There were so many excuses under which the 
wheat could be graded down that the farmer actually 
realized only about 90 to 95 per cent of the price to 
which he was entitled, and he lost on the average at 
least ten cents a bushel in addition to the extra charge 
that he had to pay for commission. 

"Now, had these grades been tested by experience. 
ght not have been as disastrous to the farmer as 
it turned out to be; but they were the most compli- 
cated _ that were ever devised, and the rules 
were sc strict that at everv turn the farmer was pen- 
alize 

"The result was that the farmer was punished 
when his wheat went below the standard fixed, but he 



THE UNJUST GRADING SYSTEM 53 

was never rewarded when it wenl above." 

He gave a very illuminating illustration of how 
this can be done by taking six cars of wheat that had 
been graded No. 2 in accord with the standard, and 
using his own words: "Mix these six cars together 
and it will be all No. 1 a gain of $180 on the six cars 
for a mixing- which in a modern elevator can be done 
in a few minutes, and so throughout the whole list. 
You can take wheat that meets with these six require- 
ments, six different samples, and they may be higher, 
and by mixing you can make No. 1 out of No. 4." 

AVhen the editor of Farm, Stock and Home called 
Mr. Hoover's attention to this gross injustice, he seem- 
ingly thought it a good joke on the farmers, for he 
replied: "I know the grades are wrong, you need not 
tell me .because I have $500,000 in cash in my treas- 
ury which I gained, because the grades which I sold 
were better than the grades I bought at, and I do not 
knoAv what to do with the money." 

And Mr. Steenerson asks: "If he was ahead a 
half million dollars, how much were the mixers in 
Minneapolis ahead? Five or six times more, because 
Mr. Hoover's purchase was of the wheat that just came 
up to the standard (skin grade), while the millers got 
the cream of the business." 

There is a great deal of discussion at present 
about the payment of the guaranteed price of the 1919 
wheat crop. 

A bill has been introduced in Congress to appro- 
priate $1,000,000,000 to pay the difference between the 
guaranteed price and the world's expected market 
price. 

Others, especially the millers, wish the present 
system continued. 

In any case the attempt will be made to claim this 
as a special tax of the whole people for the farmer. 

But right here in the unjust grading and penaliz- 
ing of the farmer as admitted by Mr. Hoover, when 
more than a year ago he had "$500,000 in cash in my 
treasury which I gained because the grades which I 



54 THE MIXERS' AND MILLERS' PARADISE 

sold were better than the grades I bought at, and I 
do not know what to do with the money." 

That money belonged to the farmers. It was taken 
from them unjustly, let the price of wheat take its 
natural course with other farm products, and pay the 
farmer the difference between the guaranteed price and 
the peace price, out of this fund unjustly taken from 
him. 

It is too bad, that we cannot take from the "mix- 
ers" the six-fold larger fund taken from the farmers, 
unjustly and return that to them also. 
MIe"'wasig A...P NNE eahpygcaepe gabotut 

Mr. Hoover, Secretary Houston, Messrs. Barnes 
and Carey knew this condition and made no attempt 
to change the grades. 

The Minneapolis Chamber of Commerce, Duluth 
Board of Trade and Chicago Board of Trade paid no 
heed to the protests of the farmers. 

They forfeited all claim to future consideration, 
as a legitimate link in the chain between producer and 
consumer. 

The farmers remonstrated vigorously against this 
unjust system of grading established for marketing 
their wheat, in addition to having the market price 
cut down more than one-third, but in this as in every 
thing pertaining to this "most important arm of war" 
the producers were ignored and penalized, but let Mr. 
Steenerson tell us that as he did in Congress: 

"They (the farmers) complained, and they had 
eighteen or nineteen different hearings before the Chief 
of the Bureau of Markets, and hardly anybody at all 
defended the grades, except a few millers and a few 
elevator men and mixers in large centers. But instead 
of listening to the farmers, to the producers of the 
wheat, the Agricultural Department absolutely refused 
to do anything. Then the farmers sent delegations here 
from South Dakota and North Dakota and Minnesota, 
their state officers, their public safety commissions. 
Representatives of the state government called an the 
congressional delegates here, and we all went to the 



SMUT DOCKAGE OUTRAGEOUS 55 

Department of Agriculture first and stated our griev- 
ances without avail. 

"Then we went to the White House and presented 
thrill there without avail." 

They presented bills in congress again without 
avail and Mr. Steenerson concludes: "We have ex- 
hausted every remedy in appealing to the administra- 
tive authorities and tried our best to get relief by legis- 
lation but we have failed." 

SMUTTY WHEAT. 

That the millers and mixers have not yet exhaust- 
ed their ingenuity in penalizing the farmer and increas- 
ing their enormous profits is evidenced by a new fea- 
ture in the market quotations and for which I have 
not as yet seen any protest made, viz.: "Discount for 
smut in wheat 5 to 11 cents." Minneapolis market 
report for Jan. 30, 1919. 

I wrote to our old friend J. A. McGovern, Chief 
Deputy Grain Inspector for North Dakota, one of the 
first managers of a farmers' co-operative warehouse in 
the Territory of Dakota, and an active co-operator 
ever since. I herewith quote from his answer: 

"What does it cost to clean smutty wheat for 
milling purposes?" 

"During my three years at the terminal market at 
St. Paul, I made a special study and inquiry in regard 
to smutty wheat. The cost of. preparing the smutty 
wheat for flour purposes — the information I give comes 
from the millers. Many of the millers claim that it 
would not cost the big mills of Minneapolis over one 
cent per bushel for washing and shrinkage. Of course, 
you know wdiere the wheat has smut balls that are not 
broken, it does not cost anything more than the clean- 
ing. In the cleaning process the smut balls are blown 
out. But wmere the smut balls are broken up, and the 
kernel of wheat is covered with smut y,ou must use 
some process to clean that smut from the kernel. 

"That may be done with brushes, and it may be 
done with lime or by water. * * * 



56 THE MIXERS' AND MILLERS* PARADISE 

"On an average I would not place the discount 
over two cents, and that is putting it very high for the 
loss, shrinkage and work in preparing smutty wheat 
for flouring. The discount they are taking is siniply 
outrageous, and there is no excuse for it whatever." 

Then, for smutty wheat, unbroken balls, it costs 
nothing extra ,and they discount it five cents. 

For the very worst cases, where it has to be washed 
at the outside two cents per bushel, and they discount it 
from 10 cents to 15 cents per bushel. A still greater- 
excess profit for the miller. 

Each farmer can now figure out for himself the 
war tribute collected from him by the Minneapolis and 
other millers. 

I would like to hear from ail such. 

Our present grain exchange system is a cancerous 
groAvth on our great agricultural industry. 

The Minneapolis Chamber of Commerce is the 
most perfect private monopoly in the Northwest. 

Co-operating with the other beneficiaries of special 
privilege in Minnesota, they control the politics and 
legislation of that state. 

The discrimination against agriculture by national 
legislation up to the spring of 1916 I have shown in part 
in my book ''The Great Conspiracy.*" 

The national legislative discrimination agaimvt agri- 
culture since then, and during the war up to • ! *j to have 
been' even worse .and my review of them is almost ready 
for the printer. 

As Mr. Steenerson truly says, "We have exhausted 
every remedy in appealing to the administra:iv-3 au- 
thorities and tried our best to get relief by legislation, 
but we have failed." 

No other industry could have survived such ex- 
ploitation, and the new "West could not have done so. 
had it not been for the new. virgin lands and free 
homesteads developed by industrious farmers with 
growing families to help in production. 

The men who control our grain exchange system 
have demonstrated beyond all question that they care 



THE DUKE OV BACON 57 

nothing for the farmers on whose labor they fatten. 
They have an ntter contempt for public opinion, and 
their greed for gain is inhuman and unlimited. 

Their continued control of the handling of our 
farm products spells disaster to agriculture in this 
group of states. 

A commonwealth that permits this group of non- 
residents who make no investments in the state beyond 
what is barely necessary to gather our products for 
them to exploit, deserve no better treatment, if they 
will continue to permit it after being advised. 

This is not a farm problem alone. Every legitimate 
industry in the state and nation is affected. 

We hear and read much good advice urging thrift, 
economy .saving and conservation of our resources, 
that we may help in saving the world for democracy 
and none so eloquent and insistent as those who are 
making most profit out of the effort to democratize 
the world. 

THE DUKE OF BACON. 

Mr. Hoover has returned to Europe. His work in 
the United States has been accomplished. For efficiency 
it has never been excelled. 

True to the friends who helped him, grain exchange 
leaders, millers and packers, he will continue "over 
there" to aid them to continue their excess profits for 
another year ,at our expense by federal aid and almost 
unlimited individual charitable donations. 

On January 9, in London, as reported by the Asso- 
ciated Press, he said in part: "He assured the people 
of this country that the high cost of food was not due 
to any profiteering by farmers in the United States. 

"The statement he issued to the British press shows 
that the guaranteed price of grain to the American 
farmer not only is smaller than the guarantee to the 
British farmer but the Americans' yield is 50 per cent 
less." 

"The present price of wheat to the British farmer 
was $3.34." 



58 HOOTER CONFESSES 

The British consumer gets the 16 ounce loaf of 
bread for five cents. The 4 pound loaf for 18 cents. 

The average price of wheat to the American miller 
is less than $2, and we continue to pay ten cents for 
the 16 ounce loaf, thanks to Mr. Hoover's control. 

He also said that "feed prices paid to the British 
farmer were about 70 per cent higher than the prices 
realized bv the American farmer for oats and bar- 
ley."' 

Mr. Hoover is entitled to boast of his exploitation 
of the American farmer, and he is also entitled to the 
highest honors from his adopted country, and the allied 
and neutral nations. 

He came to America for "The Bacon/' and he 
sent it home. 

I would suggest that a fitting honor to be con- 
ferred would be that of 

THE DUKE OF BACON. 



, 



PART THREE 

Farm Products vs. Food Products 

In my "Great Conspiracy Exposed" I have dealt 
quite fully with the discriminations against agriculture 
up to and including 1915-16, so will only deal very 
briefly with the one feature — FOOD. 

For many years the TARIFF was the bone of con- 
tention between the two political parties. High Tariff: 
Protection; Prosperity, on the one side. 

On the other, Low Tariff, or Free Trade; Lower 
Prices ; Contentment. 

Under either the cost of living continued to climb 

Labor organized and struck for higher wages, and 
just as they succeeded the cost of production increased, 
and cost of living went higher, an endless chain with 
each change growing worse. 

The iron law of wage was asserting itself. It was 
not the number of dollars a month you received that 
controlled, but the amount of the things you needed ir 
exchange for the dollar; so the 1908 presidential cam- 
paign was made on the issue of "revising the tariff" 
to reduce the "high cost of living." 

The tariff was revised, but not to the extent of 
reducing prices, so President Taft to appease the In- 
dustrial East, inegotiated a reciprocity treaty with 
Canada, the avowed purpose of which was to reduce 
the cost of living. President Taft so wrote Ex-Presi- 
dent Roosevelt. 

A peculiar thing about the treaty was that it pro- 
vided for the admission of raw farm products free oi 
duty, but retained the protective tariff on the food 
products manufactured out of farm products. 

Had it been ratified by Canada, it would have en- 
abled the manufacturers to get cheaper raw materials 
but that did not mean cheaper food. 



60 REDUCING TIIX COST OF LIVING 

It was a makeshift effort to tide over the issue at 
the expense of the farmer, which they resented at the 
polls in 1912, and the democratic party was given the 
mandate to revise the tariff to reduce the "high cost 
of living 

That revision practically duplicated the policy o: 
trying to reduce the cost of living at the expense oi 
_ dture by the placing of raw farm products on 
the free list and protecting the manufactured products. 
All that was necessary was for the country desiring 
to sell in the United States was to place the commodity 
on the free list and Canada, wishing to ship to us, did 
so. which automatically placed wheat on our free list 
and the priee of our No. 1 Northern promptly declinec 
nine cents per bushel. 

Our markets are now open to all the world for 
farm products free of duty, and it becomes the duty of 
nier in the nation to insist that the condition; 
for agriculture here be made as good, for production 
distribution and marketing, as that of any of our com 
; etit rs . 

This is especially true during the reconstruction 
period through which we are now passing. Our farm- 
ers were urged as a patriotic duty in April. 1917 : " W 
must plant everything, everywhere it will gro~ 
next year at this time the food problem will be abso- 
lutely unsolvable. and the world will face absolute 
starvation, and unles- it is -olved. may result in the 
collaj >se everything we hold dear in civilization." 

An armistice has been declared, and we all hope 
that a lasting peace will follow. The four years' war 

made the United States the Paradise of the Pro- 

The ;ost of living must be reduced, or grave 

trouble will follow. Once more the blame for the high 

cost of living will be placed upon the farmer, and this 

time importations, or threats of importations from 

ntina are being used to force down pri 

Now isthe time to watch and study our com- 
petitors. 



ARGENTINA THE GOkLIN 61 

Tlie price of wheal is supposed to be fixed. I say 
"SUPPOSED" advisedly, for any policy of dealing 
with tin 1 farmers of tin 1 country, if Left to the Depart- 
ment of Agriculture, as it will be, will be administered 
in the interests of the "mixers and millers" rather than 
the farmers. 

There was no guarantee of increased prices for 
agriculture "to stimulate production" as with all othei 
industries, nor even the cost of production guaranteed 
just the assurance of the Secretary of Agriculture and 
Food Administration that the farmers might rest as- 
sured of good prices for several years to come ,etc. 

It is barely two months since active war ceased. 

In September the price of grain, other 'than wheat 
in Minneapolis was as follows: corn $1.89, barley 92c 
oats 69c, rye $1.58, flax $4.37. 

To look at the papers now days one would be leC 
to think that the farmers grew nothing but wheat. 
But wheat is really a minor crop. 

"We are advised that the Food Administration con- 
sidered it their first duty to reduce the cost of living 
and Argentina seems to have been selected as the 
GOBLIN to force prices of grain down. 

I quote from the market reports Dec. 4: "Tem- 
porary setbacks, however, resulted from reports that 
England and France had been given a credit of $240,- 
000,000 in Argentina with which to acquire grain." 

Jan. 9 : " Corn underwent a severe fall in value 
today owing to sudden announcement that the Food 
Administration had recommended licenses for exports 
from Argentina. As a result, sensational new' breaks 
in prices followed. The close was semi-demoralized 
and 7 3-8 cents lower." 

Jan. 11. "A Food Administration official was 
quoted for September to $1.12, a decline of 77 cents 
all possible to reduce the high cost of living and thai 
Argentine prices of corn and United States prices 
should be brought nearer together. General selling 
of corn resulted ; prices closed heavy at 4 1-2 cents 
lower." 



62 RAPID DECLINE IN PRICES 

Jan. 22: "Sobsequently reports that vessel char- 
ters had been taken for 1,000,000 bushels of Argentine 
corn to come to the United States led to a sharp break 
in prices. The report was not confirmed, but prices 
closed 3 3-4 cents lower. "' 

Jan. 24. "Much was made of offer to Chicago o. 
175,000 bushels of Argentine corn at New York at 
$1.27. Prices melted rapidly and the closing trade was 
excited with prices erratic. Closed 4 1-4 cents lower. 
Xo reports of actual shipments to this country have 
been confirmed." 

Read the market reports, and you will find tha^ 
corn was made the leader . The other grains, except 
wheat, went n^> or down with corn. 

At this writing (Jan. 27) I quote: "Liquidating 
markets again carried grain prices sharply lower as 
result of agitation for lower food prices and a return 
to world market levels." 

The net result of this campaign to reduce the cos' 
of living by the Food Administration is that January 
27th the price of corn had fallen for same grade as 
quoted for September to $1.12, a decline of 77 cenfc 
per bushel. Barley to 80 cents, a decline of 12 cents 
oats to 51c, a decline of 18c ; rye to $1.50, a decline 
of 8c ; flax to $3.25, a decline of $1.12. 

Note market report of Dec. 4. On the report thai 
our government had loaned Great Britain and France 
a credit of $240,000,000 to buy corn in Argentina, 
instead of shipping our own corn, the price of our 
corn was forced down. Our Secretary of Agriculture 
refused to permit congress to assist our own farmers 
who had lost two crops by drouth, but seemed per- 
fectly willing to loan $240,000000 to help out the Ar- 
gentina farmers, at our expense. 

Then note Jan. 9. The price of our corn was not 
falling fast enough to suit. and hence the threat to raise 
the embargo on importations of corn, and down went 
the price of our corn. 

Jan. 11. Official responsibility was asserted for the 
effort, and on the 27th the goal was openly declared 



REJECTED MEAT ' ' OVER THERE ' ' 68 

"to lower food prices and a return to world market 
levels." And in accord with their plan the price of 
corn had been forced down 77 cents per bushel, and 
other cereals as quoted. 

The great absurdity of using Argentina as the 
'• scarecrow''' to force the price of all our cereals — ex- 
cept wheat — down by the fear of importations of corn 
from Argentina is shown by the following facts: "First, 
Argentina does not raise one-tenth as much corn as we 
do. 

Second. Their principal exports are cattle and 
sheep, which means that they feed their corn largely 
at home. 

Third. That we have loaned our allies, Great 
Britain and France, our credit to the extent of $240,- 
000,000 to buy food products in Argentina in competi- 
tion with our farmers. 

Fourth. All the Food Administration had to do to 
protect our farmers against this great loss was to con- 
tinue the embargo against shipments of corn, and just 
as our good allies are now doing with much of our 
manufactured products. 

That is a fair start on the part of the Food Admin- 
istration in "forcing food prices to the world's 
level," but apparently in Mr. Hoover's absence the 
Food Administration exceeded the speed limit, or some- 
thing. 

Or maybe a "few wilful senators" wanted to learn 
how Mr. Hoover proposed to spend that $300,000,000 
or $400,000,000 relief fund, to which we have con- 
tributed $100,000,000. 

It developed in the packers' investigation that an 
immense amount of the meat shipped to Europe for 
our allies was unfit for use. The British rejected it. 
and the presumption is that the same was true of our 
own soldiers, and our other allies. 

The amount of meat held up was estimated by some 
of the U. S. senators as between $40,000,000 and $50,- 
000,000, on which the packers were liable to lose, 
«and so Mr. Hoover w T as hustled to Europe to find a 



64 A GLANCE AT FOOD PRICES 

market for this rejected meat, and it will be bought 
at the packers' price for good meat, and shipped to 
starving Armenians, Syrians, etc. 

An agreement was made by the Department of 
Agriculture, the Food Administration and the packer 
to fix the price of meat monthly, based on the price 
of corn. The process was to be conservative so as to 
protect the packers. One small reduction was made, 
but it did not reach the consumer, and Avhile the price 
of corn has declined 77 cents per bushel the price o 
hogs will remain for another month, or until that 
spoiled meat in Europe has been disposed of, to pro- 
tect the packers from loss. 

Now a brief glance at "Food Prices.'" The pric .3 
of wheat was "fixed," and the profits on flour and 
mill-stuffs supposed to have been fixed. 

The price of flour has advanced slightly, but, of 
course, the price of bread will not decline until flour 
does and the price of flour will not decline so long as 
there is a flour contract out ,and that will be so long 
as Hoover, Houston, Barnes, Carey and Loring control. 

Butter is a farm product that may be manufactured 
into a food product, by the farmers individually, or 
co-operatively,and should be so wholly, but the pack- 
ers have secured control ,and during the fall and early 
winter forced the price up in the eastern markets 
around 80 cents. 

These prices "stimulated" hopes on the part oi 
dairymen all over. 

It is one of the "fats" so badly needed in Europe 
and the packers, by Mr. Hoover's aid, will no doubt 
dispose of their surplus "over there." 

One of the dairyman's principal grain feeds is 
bran. 

The price was "stabilized" by mutual agreement 
the miller to receive a profit of fifty cents a ton, and 
bran was selling around $27 per ton when the Food 
Administration decided to switch and "force food 
prices down to the world's market level." 



; 



WHAT OUR COMPETITORS ARE DOING 65 



'he dairymen had made their contracts for milk 
on the basis of bran at $27 per ton. The price of bran 
is suddenly boosted to $45 to $50 per ton, and the 
bran's chief product, butter, is reduced by 30 cents a 
pound, and still on the toboggan. 

The policy of the present administration is in line 
with that of their predecessors in their alleged efforU 
to reduce the ''high cost of living" by "forcing the 
price of farm products down to the world's market 
level." and at the same time encouraging and permit- 
ting' a private monopoly of food products manufactured 
out of farm products, and protecting them from the 
"world's market level" by a high protective tariff. 

The farmers of the Northwent and West are wak- 
ing up to this discrimination, and will in time manufac- 
ture their farm products into food products, unless this 
discrimination ceases. 

When will the consumer learn to distinguish be- 
tween farm products and food products? When will 
the voters resolve to hold our public officials to "a 
strict accountability"? 

Once more the world old axiom has been con- 
firmed, that "It is better to be the power behind the 
throne than to be on the throne." 

WHAT OUR COMPETITORS ARE DOING. 

Xow that our markets are once more open to the 
free importation of farm products, and our farm prod- 
ucts are being forced to the world's level of prices by 
the financiers of Wall Street. 

Argus-Leader, July 1, 1915: "The buying of food 
and food products for several belligerents of Europe is 
centralized in the hands of a bunch of Wall Street 
financiers. The latter have the art of deceiving the 
American public well in hand. They can afford to de- 
press the grain value barometer while they accumulate 
the actual grain/ 1 ' 

I want to thank the Argus-Leader for this polite 
way of referring to the pirates of Wall Street. 

I have shown the effect on our markets by Canada 



66 CANADA OUR GREATEST COMPETITOR 

complying with the tariff conditions, a drop of nine 
cents per bushel in the price of wheat. 

I have referred to the use made 'of one of the 
minor exporting nations, Argentina. When our spec- 
ulators wanted to boost the prices of farm products, 
other than wheat, under authority given the president 
as a war measure, the Food Administration placed an 
embargo on the importation of farm products. This 
gave the speculators a perfect monopoly of the home 
trade ; the richest mine ever opened to human greed. 

Then, when they wanted to force prices down, the 
raising of the embargo was promptly suggested, and 
on the mere rumors of a prospective importation of a 
comparaitvely few bushels of corn (175,000) as com- 
pared with our crop, the price of corn was forced down 
77 cents per bushel. The same kind of rumors are 
good for another forty or fifty cents per bushel decline. 

CANADA. 

Our greatest competitor for all time, both at home 
and abroad, however, is and will be our good neighbor 
to the north, Canada. 

The farmers of western Canada, many of them re- 
cruited from the United States, are an unusually pro- 
gressive body of men, who are reaching out for, and 
will soon control the political situation in Canada. 

Already they have made good progress in securing 
an "open market" for their grain, and what they have 
done, and are doing, we can do and must do, or lose 
many thousands more of our progressive farmers to 
them. 

In an' address before our State Grain Dealers' an- 
nual meeting in December, 1913, I said, in part, on this 
subject: 

"But. in our neighbors to the north, Canada, we 
have a new home competitor. 

"As yet they have the same monopolistic tenden- 
cies to contend with. Gentlemen's agreements as to 
traffic rates both on land and water, and the oppres- 
sion having been greater, they woke up sooner. 



INTERIOR TERMINAL ELEVATORS BEST 67 

"On the demand of the organized farmers of the 
new West they will soon have a government owned and 
operated railroad to Hudson Bay, which is nearer 
Liverpool than is New York. Also terminal elevators 
owned and operated by the Dominion government. 
The Dominion government has also agreed to build six 
interior terminal elevators for cleaning, curing and 
storing grain, two each in Manitoba, Saskatchewan and 
Alberta. 

"They are now building a terminal elevator at 
Port Arthur, and have agreed to build a terminal ele- 
vator at Vancouver in time to handle grain for the 
opening of the Panama canal. This to accommodate 
the grain growers of Alberta, who claim that they will 
be able to save fourteen cents per bushel on the trans- 
portation of their wheat to Liverpool. "We in the 
Northwest have paid our share for the construction o 
that canal ,and it will not save us one mill per bushel 
but it will help our competitors. 

"What compensation are we to have for it? 

"We should be satisfied with nothing less than a 
public owned and operated railroad to our Atlantic 
seaboard for our products — operated at cost." 

There are several very important features in con- 
nection with the proposed state terminal elevators 
that have not been given due prominence. 

The climatic and other conditions in western Can- 
ada, being so similar to our own, we may well benefit 
by their experience. 

I will quote from "Grain Inspection in Canada" by 
the Department of Trade and Commerce for 1914 (the 
capitals are mine for emphasis) : 

Page 56: "Storing grain pending sale on the At- 
lantic seaboard would involve few T er risks, yet shippers 
do not store at the Atlantic seaboard but prefer to store 
it at interior points like Fort William and Port Arthur 
BECAUSE OF THE LARGER NUMBER OF MAR- 
KETS OPEN TO THEM FROM THOSE INTERIOR 
POINTS. To provide inspection and elevator facilities 



68 AT INTERIOR STRATEGIC POINTS 

on the Hudson Bay and Pacific coasts would not give 
either route a fair trial. 

"The second method has, therefore, been adopted 
the method, namely, of erecting at the Hudson Bay and 
Pacific coasts transfer elevators similar to those at 
Montreal, Halifax and St. John, AND TERMINAL 
ELEVATORS AT STRATEGIC POINTS IN THE IN- 
TERIOR, CALGARY, SASKATOON AND MOOSE 
JAW, SIMILAR TO THE ELEVATORS AT FORT 
WILLIAM AND PORT ARTHUR." 

"These five elevators are now being constructed. 
THE ELEVATORS AT CALGARY, SASKATOON 
AND MOOSE JAW ARE BEING EQUIPPED WITH 
FULL INSPECTION FACILITIES. These three points, 
therefore, will be terminal points in the same sense 
in which Fort William and Port Arthur are terminal 
points, and the three elevators will be owned and oper- 
ated by the Dominion government." 

"Grain stored at these points will be available for 
shipment via the Panama or Hudson Bay routes, should 
these be more economical." 

"The elevators at the Hudson Bay and Pacific 
coast will also be operated by the government, and 
they will be provided with sufficient storage capacity tc 
handle the grain shipped through them. " 

The terminal elevator at Vancouver has been com- 
pleted ,and in addition to aiding Alberta, Australasia 
is now shipping wheat to Europe via Vancouver trans- 
ferring there and shipping via the Panama canal. A 
second competitor aided by our Panama canal. 

Another point developed elsewhere in their re- 
port is that these three "strategic elevators"' are so 
located that they can ship east, all rail,, or via Fort 
William, or Port Arthur, or south via Duluth for use 
in the United States, or to Europe via New York. 

The Dominion government has also completed a 
transcontinental line of railroad, with direct connec- 
tions with these three points, as well as owning the 
Hudson Bay railroad, and let me repeat, Hudson Bay 
is nearer Liverpool than is New York. 



STRENGTHENS CONTROL OF ELEVATORS 69 

AS A REGULATOR OR CONTROLLER. 

At Fort William and Port Arthur there were in 
1914 thirteen terminal elevators with a total storage 
capacity of 40,135,000 bushels. 

That of the Dominion government was 3,250,000 
bushels. 

The official report says, page 54: "The erection 
and operation of a large terminal of the Dominion 
government strengthens the control exercised over all 
the elevators. It gives first hand knowledge about the 
cost of construction and operation, and about every 
phase of the business of the public storage of grain. 
Farmers can now ship their grain either to an elevator 
operated by the government, or to one operated by 
their own company, the Grain Growers' Grain Co., or 
to one owned by the Canadian Pacific Railway Co., or 
to any of those operated by commercial companies. ' ; 

"The Dominion government elevator strengthens 
the control of all the others. It gives first hand knowl- 
edge about the cost of construction and operation, and 
about every phase of the business of the public storage 
of grain." 

CLEANING AND SCREENINGS. 

The selling of our grain before cleaning has been 
one of the sources of the greatest loss to the producer 
and greatest profit to the buyers and mixers. 

The foreign matter not only affects the grade, but 
the farmer receives nothing for the screenings, and in 
addition pays the freight on them to the terminal ele- 
vators. 

Cleaning, page 53: "The inspectors define what 
percentage of admixture should be cleaned out of the 
grain as received ,and the actual cleaning is under 
their supervision. The Canada Grain Act provides foi 
the compensation to be paid, if any, to the owner 0' 
the grain for the screenings." 

The Dakota farmer who received a check in pay 
ment for his screenings would be more apt to frame 
it and hang it up as a curiosity than use it; and yet 



70 INSPECTION AT TERMINAL FINAL 

there is good feeding value in those screenings. They 
are readily bought for feeding purposes. 

There is in this feature a two-fold gain. Inereasec 
price, because of increased grade by cleaning, and com 
pensation for the screenings. 

INSPECTION AT STATE TERMINAL FINAL. 

A more important feature perhaps is, that the in 
spection at these state terminals, or "strategic elevat 
ors" is that the inspection there is final. Page 52 
"The terminal elevators have up till the present been 
all at Fort "William and Port Arthur. They are called 
"terminals", not because they are situated on Lake 
Superior, or because they have been built at the lake 
terminal yards of the railway lines, but because the 
inspection of western grain ends at them." 

"The grade given as it leaves the elevators at 
these points (now includes Moose Jaw, Saskatoon anc 
Calgary) is the final grade, the grade on which it is 
sold and delivered; both in Eastern Canada and the 
foreign mrkets. Eastern inspectors have nothing to d 
with the grading of western grain — they are restricted 
to the eastern product." 

Not only is there no mixing permitted in the gov- 
ernment owned and operated elevators, but, page 59 : 
"Apart from those operated by the Department of 
Railways and Canals, these elevators are required to 
take annual licenses from, and file bonds with, the 
Board of Grain Commissioners. Their tariffs and 
charges are under the control of the Board and they 
are required to conform with certain sections of the 
Grain Act in receiving, binning, treating and shipping 
the grain. The principle of these provisions is that 
they may maintain the identity of the grade; what- 
ever grade the grain carries as it is received, it must 
carry as it is delivered."'' 

There is no mixing, or degrading, in the govern- 
ment elevators, and none permitted in the non-govern- 
ment elevators. 

As shown elsewhere, in my own experience, the 



NO MIXING IN ELEVATORS PERMITTED 71 

value of our No. 1 Northern wheat depreciated 15 
cents per bushel by mixing in transit. 

The present Hoover, Houston, Barnes grades are 
marvels for the opportunity for profitable mixing as 
compared with anything in the past. 

As Steenerson well says a veritable "paradise for 
the mixers." 

CURING OR DRYING. 

The treating, curing, or drying of our "out of 
condition grain" has been a source of great loss to 
the producers, and immense profit to the handlers. 
Western Canada's chief crop being wheat, it is natural 
that they should have paid more attention to the de- 
tails of marketing . At any rate the farmers organized 
more thoroughly .and insisted on controlling the hand- 
ling of their grain in a much more effective manner 
than have our farmers. 

From page 53 of the report we quote: "The ter- 
minal elevators handle a large percentage of the to- 
tal grain sold. Their operation affects every grain in- 
terest in the country, farmers, dealers and millers. 
They have accordingly been subjected to keen scrutiny, 
fierce criticism and detailed legislation ,and that in re- 
gard to almost every phase of their operations. Com- 
plaints have been directed against them as regards 
the trustworthiness of those operating them; tariffs 
and charges; grades and weights ;their methods of 
storing, binning and shipping ; cleaning and drying ; 
loading and mixing; and their accumulaton of sur- 
pluses. And the legslation governing them has been 
designed with explicit reference to these complaints." 

In our older settled country we have perhaps for- 
gotten our own experience with damp, or "out of con- 
dition" grain, but we old timers have all had some ex- 
perience, and I am under the impression that even in 
1917-1918 a good many of our farmers had some expe- 
rience with damp grain, more especially corn. 

My first experience was in 1884. I had 100 acres 
in wheat, and for a country where "it never rained dur- 



72 GRAIN HOSPITALS FOR CURING 

ing the harvest season" we had considerable rain. As 
a result a part of my wheat was too damp to save foi 
seed, and I had to sell it for just what it would bring. 
The price for No. 1 Northern was around 70 cents, but 
the best I could get for the damp wheat was 39 cents 
31 cents off. The curing, or drying, process in Min- 
neapolis cost then probably four or five cents per bushel 
a clear profit to the grain handlers of at least 25 cents 
per bushel. 

That was not my only experience with damp grain 
But, let me quote once more from the official report 
r,age 56: "The elevators at Calgary, Saskatoon and 
Moose Jaw will serve other purposes besides providing 
for these new routes. They will bring the work of in- 
spection somewhat nearer to the grain- growing area. 
In addition to that, they will -nrovide, for the first time 
in Western Canada, hospital apparatus upon the grain 
field. 

"Hitherto grain needing to be dried had to be 
shipped to Fort "William or Port Arthur, and the total 
lack of drying plants on the grain-growing area has 
in some years caused enormous loss. In 1912, for ex- 
ample, there was a very large percentage of the west- 
ern crop damaged by rain and snow. The damaged 
grain contained a very high percentage of moisture 
which could not be extracted until the grain reached 
Fort William or Port Arthur, and much of it went out 
of condition before it reached the drying plants there. 
The amount lost in that one season would have built 
the three elevators now being erected." 

Page 58: "The enormous quantity of grain grown 
in Western Canada, the difficulty of shipping it all by 
the eastern route, a difficulty enhanced by the shortness 
of the period of navigation and the long rail haul from 
the grain fields to the Atlantic, these conditions have 
led to the hope, practically universal in the west, that 
the opening of the Panama canal will be an immense 
gain to the grain growers of Alberta, and the opening 
of the Hudson Bay route to grain growers of Saskat- 
chewan. The government, by the construction of the 



.MIXERS USE WATER CURE FOR OATS 73 

five elevators named, is doing all that can be done, and 
more than some consider should be done, to make the 
new routes successful." 

The co-operative farmers of Alberta, who claim to 
possess the "bread basket of the world," 1 have the 
choice of shipment to the world's markets ^specially 
Liverpool, west, via Vancouver and the Panama canal; 
northeast via the Hudson Bay; east via all rail or via 
Port Arthur; or southeast via Duluth and New York: 
while Ave in the Dakotas are at the tender mercies of a 
group of private monopolists who exact in tribute ev- 
ery cent the traffic will bear, at every turn or step on 
the way from the producer to the consumer. 

In Canada the government has provided hospitals 
for cleaning out foreign matter and drying of damp 
grain. 

Our "mixers" were caught with 75 carloads of 
oats for export which had been liberally treated by 
mixing in low grade barley and other foreign matter, 
and as the commercial grade of oats is determined 
solely on weight, it was found on investigation that 
they had been adding two to four per cent of water. 

The "mixers" w T ere making immense profits, and 
of course will apply to the courts and continue the 
practice until a decision has been rendered. 

PRIMARY CO-OPERATIVE ELEVATORS. 

For thirty odd years we have been advocating and 
encouraging farmers' co-operative elevator companies 
as a first step in marketing our grain crops, but never 
as a final solution of the marketing problem. 

AYe have always insisted that "better marketing" 
was more important than "better farming," for agri- 
culture, as well as every other industry . As a rule they 
liave been successful and should be encouraged until 
we have one at every railroad station in grain growing 
sections. 

The good prices for grain for the past four or five 
years has enabled the farmers to help themselves, so 



74 PRIMARY CO-OPERATIVE ELEVATORS 

that they are now well able to take care of the pri- 
mary market if they wish to. 

With experience, these primary co-operative ele- 
vators are becoming very profitable. The manager of 
one of them in this state told me a few days ago of 
the success of their local elevator. It was organized 
on a capital of $6,500. Apart from regular dividends 
they issued a stock bonus of $6,500. The past year 
they earned and distributed in profits $21,000. This 
was an excellent showing for the farmer stockholders 
but it did not help the consumers of bread one par- 
ticle. 

The farmer himself is a large consumer of wheat 
products — flour and millstuffs, and for which he has to 
pay an enormous profit, and an unnecessary transpor- 
tation and handling tax from Dakota to Minneapolis 
and return ,even though the wheat is ground in his 
own home town. 

So, the farmer is as much interested in the forward 
movement as any other class. The same would have 
been true of any other farmers' co-operative movement 
as to terminal elevators and flouring mills, or transpor- 
tation and handling. 

In states where agriculture is the principal indus- 
try state aid might well be justified in the building of 
primary co-operative elevators *in the interest of the 
whole state by retaining the profits in the state to 
build up the state, rather than outside communities. 

In practice this has proven very satisfactory with 
our Canadian neighbors and competitors of Saskatche- 
wan and Alberta. 

Unfortunately as a rule our co-operative elevators 
ship directly to the same grain exchange monopoly a! 
the terminal, they thought they were escaping at the 
primary market, and as a result, while they saved a 
nickel a bushel at the primary, they were scalped sev- 
eral nickels at the terminal, as we have shown else- 
where. "We must go forward. 

It has been said that "imitation is the sincerest 
flattery.'' In their present efforts at co-operation the 



IMITATION THE SINCEREST FLATTERY 75 

farmers are simply following the plan outlined by C. 
M. Schwab of separate corporatons, each going one 
step farther from producer to consumer. He takes the 
credit of having inspired the late J. P. Morgan with the 
industrial idea of following the iron ore from the mine 
to the retail merchant, or consumer by a series of cor- 
porations ,each one making a profit. This was prompt- 
ly accepted by Mr. Morgan, and Mr. Schwab became 
one of the great beneficiaries of the system of produc- 
ing, manufacturing and distributing a product from 
the producer to the consumer, with a profit of all the 
traffic will bear at each and every step on the way. 

This has become the fixed policy of all of our indus- 
trial monopolies. 

The great world's war has taught Us that this 
cannot be permitted with OUR DAILY BREAD. 

The next step in order then will be state terminal 
elevators. 

A STATE TERMINAL ELEVATOR. 

It would seem very plain then, that no co-operative 
effort short of the state can be of any material help in 
solving this problem. 

Aud, while I hope to see my dream of 1887 come 
true of several terminal elevators on the eastern bor- 
der of our state on the main lines of our railroads, I dc 
not expect, nor would I advise that we make such an at- 
tempt all at once. I still believe in the step by step 
plan. 

Consequently would advise making the trial with 
one good state terminal elevator, following the plan 
adopted by the Dominion of Canada as. quoted, and 
which has proven so satisfactory to them after several 
years' trial. It is no longer an experiment. It is a 
success. 

For wheat the grades should be based on the 
milling value of the wheat. Dr. Ladd, of the North 
Dakota Agricultural College, has demonstrated beyond 
all question by his little experimental mill the injustice 
of the present system of grading wheat. 



76 FIRST STEP A TERMINAL ELEVATOR 

This was such a remarkable departure from the 
accepted theory of wheat values that the Senate Com- 
mittee on Agriculture inserted in the agricultural ap- 
propriation bill an appropriation of $25,000 for the 
purpose of an experimental flouring mill, one of the 
most practical and beneficial propositions ever made 
in the interest of agriculture. 

Of course this would have interfered very ma- 
terially with the grain exchange mixers and their 
friends, the millers, separate in name only, — and true 
to his record, when anything of real benefit to agri- 
culture was proposed that might interfere with the 
profits of special privileged private monopoly, the Sec- 
retary of Agriculture opposed it so strongly in commit- 
tee as to secure its withdrawal, to the great satisfac- 
tion of his friends, the grain mixers and millers. 
"What a misfortune for agriculture that we have no 
secretary for that department. 

If the federal government will not provide such an 
experimental flouring mill, then some one of the whea^ 
growing states should do so. Why not South Dakota* 

South Dakota should cut loose entirely from the 
present grain exchange system, and establish a system 
of our own to control the handling of our own grain. 

We should have an inspection and grading sys- 
tem of our own based on common sense and milling 
or feeding value. 

Every grain warehouse and elevator should be 
operated under a state license. 

It should not be necessary that our wheat be ship- 
ped to, or through, either Minneapolis or Duluth. 

There should be a market for all the wheat that 
one terminal elevator could handle with the "outside 
mills,"' if the terminal elevator were located at a good 
"strategic point" as was done in Canada; and where 
there would be the best choice for selection of markets 
and on the way to market. 

With a "grain hospital" for the cleaning, curing 
and drying of "out of condition" grain. 

This would be of very great advantage to the co- 



INDEPENDENT STATE INSPECTION 77 

operative elevators of the state where they could shi] 
their "out of condition" grain and have it treated, in 
stead of taking- chances on shipping it to Duluth 01 
Minneapolis. 

Could we sell our wheat on a South Dakota in- 
spection? 

I did it successfully for several years as an indi- 
vidual by sample and never had any trouble. 

There are a large number of what- are termed "out 
side mills", — that is, outside of the twin cities, south 
southeast and east. These are what are called inde- 
pendent mills, and would buy where best service would 
be given. 

For a good part of the year, they must either buy 
on the Minneapolis Chamber of Commerce through 
commission men, or a special representative, and this 
carries with it all the expenses of commission, switch- 
ing, etc ,out as well as similar expenses in Minneap- 
olis, provided the grain is bought on track. Of course 
if it has passed through an elevator there are stiil 
more charges. 

As it is now. when they buy South Dakota wheat 
in Minneapolis for mills south or southeast, there is 
all the Minneapolis charges in and out, added ,and an 
increase of several cents per bushel in transportation 
charges. 

The direct shipments from a terminal elevator in 
South Dakota to mills in the great states of Iowa. 
"Wisconsin, Illinois, etc., on a very conservative basis 
should be six to eight cents per bushel saved. The 
major part of it inuring to South Dakota producers 

With a storage capacity sufficient to guarantee 
"outside mills" the grain they would need all the year 
round, it should be an attractive proposition for them 

TRACTOR SERVICE. 

The state terminal elevator should be supplied with 
tractor grain service wagons so that a farmer wishing 
to sell direct from machine, or having damp or out oi 
condition grain could notify them when threshing and 



78 SHIPPING DIRECT TO OUTSIDE MILLS 

have his grain hauled and treated promptly. This 
service could, be performed by the state very much 
cheaper than individual farmers could possibly do it. 
In addition it would give the smaller farmer, and the 
tenant farmer a decided advantage over the presen; 
system. 

This branch of the service could be enlarged jus 
as fast as improved roads would permit. 

In addition the -products from the flour mills could 
be delivered at much less cost on these trips. 

The postoffice department is now pushing this 
tractor parcel post service for farm products, out of 
our industrial centers for fifty miles or more. During 
the greater part of the year 100 miles here can be made 
as easily as fifty miles there. 

FLOUR. 

"Set a thief to catch a thief" used to be a motto. 

The modern method is to accept volunteer graft- 
ers to control the grafters and then all unite to grab all 
in sight. Mr. Hoover called them "skunks," but that 
was for public consumption only. He seemed to like 
them. 

The control of flour milling was the third link in 
the chain from producer to consumer. 

June 9th Mr. Hoover gave this program, approved 
by the president, to the public, the first plank being: 
"Patriotism will be made the basis of food control 
during the war at the start." 

August 13th Mr. Hoover said: "The food ad- 
ministrator has had the patriotic co-operation of the 
leading millers of the country and these millers have 
organized, at the request of the food administrator, a 
committee to represent the entire trade." 

"The basis of determination will be to arrive at a 
price which represents a fair return to the producer 
for his patriotic endeavor to increase the supply, and 
a proper reduction of the cost of flour to the con- 

er." 

July 10. Mr. Hoover in a report to President Wil- 



"SET A THIEF TO CATCH A THIEF" 79 

son : "The consumer has suffered from 50 to 100 per 
cent, and the producer gained nothing." 

Mr. Hoover before a Senate committee said: "The 
speculators in flour alone have taken $50,000,000 a 
month from the American public during the last five 
months. ' ' 

Apparently the president has accepted every state- 
ment Mr. Hoover has made and it must embarrass him 
when these several statements are analyzed and com- 
pared, as they must be, in time. 

The agreement as reported in the press August 
27th was in substance : 

"Profits of the millers on the wheat crop of 1917 
have been tentatively fixed by agreement with the 
food administration at Washington as follows: 

Flour — 25c a barrel, net. 

Mill Feed — 50c a ton, net. (Now, for the joker.) 

"In these profits the millers are to absorb the in- 
terest on their investments and depreciation of plants, 
etc." 

'"'The proposed profit on flour and its by-product, 
mill feed, are much less than prevailing profits for 
many months past." 

E. C. Loring, of Minneapolis, president of the 
Pillsbury Co., is the national adviser and James E. 
Bell, vice president of the "Washburn-Crosby Co., chair/ 
man. 

"The millers will enter into formal agreement to 
this effect with the food administration, which will 
check up the costs of manufacture, and which can at 
any time refuse to supply wheat to the millers if the 
agreement is not carried out." 

John Pillsbury said: "The millers have no guar- 
antee that they will get the maximum profits allowed 
by the food administration. They will not get more, 
but they may get less." 

"There would be no chance to evade the regula- 
tions ,as the millers would be compelled to pay a fixed 
price for the wheat, the costs of manufacturing are 
easily obtainable, and there could be no juggling as 



80 DOLLAR A YEAR PATRIOTS IX CONTROL 

between flour and mill feed, as the amount of both in a 
given quantity of wheat is easily determined." 

It will be noticed from the foregoing that the 
profits are to be "much less than prevailing profits foi 
many months past." 

The agreement had been in effect for nearly a year 
before the general public had been roused to the fact 
that the price of flour and bread had not declined ac- 
cording to promise. Then it began to be rumored 
thatthe millers were making large profits, etc. But 
neither Mr. Hoover or his associates in flour control 
seemed to have heard of it, or been aware that the 
speed limit in profiteering had been exceeded. 

The searching for sources of excess war profits for 
purposes of taxation was apparently the first to attract 
attention. This was soon followed by a resolution of 
Senator Borah for a commission of inquiry, but suffi- 
cient had leaked out to wake up the food controller 
and volunteer associates, who had all been asleep at the 
switch, or too busy gathering in the profits to pay 
much attention to any one else, and then in big head- 
lines from Washington we find : 

"Flour Profiteers Struck a Body Blow." 

"Millers'' Profits Cut as Result of Disclosed Price 
Violations. ' ' 

AVhen the millers were called on for an explana- 
tion, why the price of flour had not declined with the 
price of wheat the plausible ( I) theory given was that 
a large number of contracts had been made based on 
the higher priced wheat and that until those contracts 
had been filled it would be unfair to reduce the price 
of flour on new contracts. That kind of control beats 
competition all to pieces. 

The opportunity for big profits was too good to let 
pass. 

But the consumers began to get uneasy, and some- 
thing had to be done. Then the millers were called 
upon to render an account of their "patriotic co-opera- 
tion" and make a statement of costs and profits, and 
they unanimously refused point blank. That was a 



HOOVER FAILS TO WEED OUT SKUNKS 81 

"trade secret/' Mr. Pillsbnry had said that "the 
costs of manufacturing are easily obtainable" 

Mr. Hoover had claimed that if the millers refused 
to abide by the agreement, that the food administra- 
tion could at any time "refuse to supply wheat" That 
was true, but it was not even threatened when the mil- 
lers refused. 

Here was a splendid opportunity for Director 
Hoover to weed out "the skunks" in the flour trade. 
There is no public report that he made the effort. 

The price of flour had not been reduced very 
much, and the price of by-products largely increased. 

The excuse given was that "production had been 
limited, hence the relative overhead expense had been 
increased," and the unsophisticated director and asso- 
ciates apparently accepted that as sufficient reason to 
let "well enough alone." 

These overhead expenses, then, is the thing Mr. 
Hoover should have looked into. If a dollar a bushel 
less in the price of wheat would not compensate them 
for the overhead expenses of one-fourth of their capac- 
ity, with the price of the by-products almost doubled, 
then it is absolutely essential that we learn just what 
these overhead expenses are; but they will not tell; 
that is a "trade secret,"' and they know that wheat 
will not be withheld, for they control. 

Then we learn from press reports: 
' "Flour Profiteers Struck a Body Blow." 

"Millers' Profits Cut as Result of Disclosed Price 
Violations." 

"Big shakeups and price changes in the flour 
milling division of the United States Food Administra- 
tion were made known by the Minnesota food admin- 
istration and in dispatches from Washington today." 

"A body blow at profiteering which has played 
ducks and drakes with the government price regula- 
tion program is struck." 

"The grain division, renamed the cereal division. 
with Julius Barnes, Duluth, still at the head /takes 
over all cereals today." 



82 SHAM REPROOF OF PROFITEERS 

"J. S. Bell, vice president "Washburn-Crosby Co. 
Minneapolis, steps out as chairman of the millers' di- 
vsion and A. H. Lingham, New York miller, is to 
dispose of his milling properties in New York and 
become head of the milling department of the cereal 
division of a new department." 

The "shake up" results in Mr. Bell apparently 
being made the GOAT, but the men chiefly responsible 
for the scandal, Messrs. Hoover, Barnes, Carey and 
Loring, remain in control. The price of flour has not 
been reduced, and up to February, 1919, Mr. Bell 
appears to be in control. 

The disgraceful compromise made was that the 
government is to get a certain number of barrels of 
flour at one dollar per barrel, until the extra profits 
taken have been absorbed, instead of reducing the 
price of flour under the specious plea that they could 
not return it to the "consumer who paid the extra 
money." The consumers of this year would be the 
same as those of last year, so that was a mere sub- 
terfuge to leave the control with the millers as usual. 
How many barrels of flour has the government received 
at $1 per barrel. That also is a trade secret. 

Sometime later, if we can get a look at the books, 
it will be interesting to compare the excess profits 
made, with the credits given the government. 

Of course, as usual, "A Sweeping Inquiry" is to 
be made, but what the consumers are most interested 
in is cheaper flour now. 

A faint idea of the excess profits made will be 
gained by the brief report given in the press, of the 
increased profits made in 1917 over the large excess 
profits made in 1916. 

"Flour Mills Profitable. 

"Of more than 500 flour, feed and grist mills list- 
ed, only a few failed to show largely increased profits. 
One $2,500,000 concern made $752,000 in 1916 and 
$1,200,000 in 1917. Another capitalized at $2175,000 
increased its profits from $895,000 in 1916 to $1,462,000 
in 1917. Another with $12,500 capital made $82,000 in 



ENORMOUS PROFITS IN MAKING FLOUR 83 

1917, or 315 per cent more on its capital stock than in 
1916. 

11 CASES WHERE PROFITS JUMPED MORE 
THAN 100 PER CENT IN THE FLOUR, FEED AND 
GRIST MILLING BUSINESS WERE TOO NUMER- 
OUS TO MENTION." 

The millers and mixers of Minneapolis have de- 
monstrated beyond all question that they will not hesi- 
tate to take advantage of the public for their own 
private profit, and they should not be entrusted with 
the handling or distribution of any public necessity, 
or utility. 

They have secured supreme control of legislation 
in Minnesota where their terminal elevators and mills 
are located. 

The Department of Agriculture is under their in- 
fluence as was so clearly shown since the government 
took control of food administration. 

It is an absolute waste of time and energy to try 
to regulate or control them. 

As a sovereign state we should build up a system 
for the marketing of our grain, the manufacturing of 
our farm products into food products, and distribution 
to the consumer at the minimum of expense . 

It will be claimed that we have a sufficient milling 
capacity at present for our needs. In a sense that is 
true; but they are not operated for our needs, but for 
their own profits. 

They are a part of the grain exchange system, and 
must be put out of business along with it . They belong 
to the class who consider agreements, contracts, or 
treaties as "mere scraps of paper." 

To ensure the success of a state owned flour mill 
it will have to be located in a good railroad center, and 
for obvious reasons, adjacent to a state owned and 
operated terminal elevator, so that it would have its 
wheat o nthe most favorable terms and best condition : 
for it must be remembered that the millers monopoly 
will fight the first state-owned flour mill to the limit 
of their ability, which includes the National Millers' 



84 STATE OWNED AND OPERATED MILL 

Association ,the National Packers' Association, and ev- 
ery other association for the manufacture or handling 
of food products. 

It should be new and modern in every essential 
feature . 

All flour mills in the state should be under license. 

The suggestion that there are flour mills in the 
s J ate that might be rented by the state for a test should 
not be seriously considered. First: The flour mills 
that have been running during this war period, have 
become a part and partner with the National Millers' 
Association, and sharing in the enormous profits ap- 
propriated by them. They would laugh at the sugges- 
tion. 

Second : The idle flour mills that might be rented 
are idle because they are not properly equipped or lo- 
cated to make a success. 

Third : To insure success, it must be operated and 
managed by an administration wholly in sympathy 
with the broad principle of public ownership and ope- 
ration of public utilities. 

A half hearted effort, under unfavorable condi- 
tions should be discouraged by all true friends of the 
movement to reduce the cost of living by eliminating 
this "Paradise of the Profiteers." 

WHEAT— FLOUR— BREAD. NOW WE COME TO 
BREAD. 

May 28th Mr. Hoover said: "With the lower 
classes in Europe bread is the fetish of food and with- 
out the loaf you could not preserve tranquility. 

June 19th he said: "Without government food 
control, success in the war may be imperiled.*' 

Mr. Hoover was appointed director to control 
and regulate the price of food — all kinds of food — and 
fuel. 

"'"In order to do justice to the producers who have 
shown great patriotism in a special effort to increase 
production in 1917 and further stimulate the effort for 
1918 it is absolutely vital that we shall protect the 



\\ 1 1 BAT— FLOUBr-BREAD 85 

farmers from a slump in prices this year, due to a 
glut, as above, or from the uncontrolled decisions of 
any one buyer." 

And our farmers have been praying ever since to 
be protected from our imported proctector, and the con- 
sumers might well join in the prayer. 

Messrs. Barnes, Carey, Loring and Corby are left 
in control. 

The bakers, not to be outdone, patriotically volun- 
teered to control their industry and Mr. Corby, theii 
national president, was selected to be the controller 
and the people — the consumers — were anxiously wait- 
ing for that 14-ounce loaf for 5 cents with which Mr 
Hoover had beguiled them, but on September 1st, Mr 
Hoover announced that the best the public may exped 
is a 16-ounce loaf for 10 cents. 

"The bakers, through Mr. Corby, have supplied 
data and facts to assist the food administration in per- 
fecting its plans relative to bread." 

These "voluntary aides" are proving a wonder- 
fully efficient factor in "furnishing data and facts" to 
the food director. To-wit : The report says: "Mr. 
Hoover made it clear that under the food control act, 
except in isolated instances ,the food administrator has 
no control of prices from the time the flour reaches the 
wholesaler until it is sold by bakers and retailers for 
bread. The price reduction can be accomplished only 
by voluntary action by bakers and retailers and by the 
assistance of the public in eliminating waste." Strange 
that he forgot how our allies secured the five cent loaf. 

Mr. Corby, president of the National Bakers' As- 
sociation, the bakers' voluntary controller (?) says 
further: "That a sixteen-ounce loaf for ten cents 
would represent a slight reduction in the present 
prices. Standardization would be hard to bring about, 
since varying costs in ingredients that go into bread 
have made it necessary to increase the price or reduce 
the size of the loaf." 

I just inquired of an excellent bread baker what 
ingredients went into bread making besides flour and 



86 BREAD CHEAPER IX EUROPE THAN HERE 

water. The answer was. salt, shortening and yeast. 
Then according to Mr. Corby, it is not the cost of the 
flour that causes the change in the price of bread, bnl 
the varying cost of the salt, lard and veast. Can von 
beat it? 

President Ladd of North Dakota and President 
Waters of Kansas, who were members of the price fix- 
ing committee, claimed that the baker conld make 300 
14-ounce loaves from a barrel of flour. This at 5 cents 
a loaf would make $15. Price of wheat as recom- 
mended by committee $2, or $8 for the barrel of flour, 
leaving a margin of $7 to be divided between the 
miller and the baker. 

A 14-ounee loaf for 5 cents would mean a 16- 
ounce loaf for a fraction less than six cents. 

The highest price we paid here for a 16-ounce 
loaf was 13 cents. 

At that time the one-pound loaf made out of our 
wheat was selling in Great Britain for 5 cents. 

"Washington, Sept. 5. — Europeans are buying 
war bread cheaper than Americans. 

"With flour made from American wheat, bakers 
of England. France and Italy are selling bread 60 to 
100 per cent cheaper than we are paying. 

"This was the statement of Representative Keat- 
ing (Colo.) today. 

"He said in Great Britain 32 ounces of bread sell 
for 11 cents : in France, 35 ounces for 9 cents ; in Italy. 
35 ounces for 8 cents, and in Belgium 35 ounces for 11 
cents. In Washington, D. C. 14 ounces sell for 10 
cents, he said. 

'Remember.' said Mr. Keating /the grain which 
goes into bread was raised and sold by American farm- 
ers, that speculators and middlemen made their reg- 
ular profits; that freight was paid to the seaboard 
and the highest cargo rate in history paid for its ship- 
ment across_the Atlantic. 

" 'What reason can be assigned, then, for the 
fact that bread is sold cheaper 5,000 miles away fron 
the original wheat field than it is at home?' " 



FOOD HANDLERS MAKE BIG PROFITS 87 

The price of our wheat here was reduced on an 
average to about $2 or less (we have a good flour mil] 
here) the one pound loaf sells for 10 cents. 

The president of the National Bakers' Associa- 
tion, Mr. Corby, was the chief advisor (voluntary $1 
a year) and the price of bread had to keep up with 
the price of flour, with corresponding profit. 

"Food Handlers Make Big Money." 

"The report furnishes striking evidence to sus- 
tain charges that food dealers and manufacturers have 
been helping themselves liberally. Of 216 concerns 
listed under the caption "Bread and other baking 
products", profits of an amazing character was shown 
For example, one company, capitalized at $40,000, in- 
creased its profits from $50,000 in 1916 to $107,000 ir 
1917. Few of them showed increases of less than 20 
per cent on their capital stock." (Federal Trade 
Commission.) 

How can Great Britain pay the same price for 
wheat here as we do, and the cost of transportation 
etc., and sell for one-half the price we have to pay? 

September 6th ,last year, Lord Rhonda, food con- 
troller of Great Britain, explained it thus : 

"We have practically come to an end of the bene- 
fits derived from large government advance purchases 
in the past, with the result that the state now steps 
in to provide bread at a price within the means of our 
poorer class. The state aid takes the form of a sub- 
sidy. As a result we will supply our millers at a price 
enabling them to provide the baker, after September 
17th, with flour from which a four-pound loaf can be 
madeand sold over the counter for a maximum price 
of 18 cents and the baker will still make a reasonable 
profit. 

"The government subsidy mentioned with which 
to control bread prices will total $200,000,000 a year. 
Other maximum prices after September 17th are : One- 
pound loaf 5 cents, two-pound 9 cents." 

We are following British precedents in this war 



88 PUBLIC NEED MET BY PUBLIC TAX 

in many ways; why not have done so in this matter 
of wheat, flour and bread? 

To encourage production, they (our allies) volun- 
tarily increased the price of all farm products and 
guaranteed those prices for three years, regardless of 
the duration of the war, at such a figure as induced the 
breaking up of over 3,000,000 acres of land held out of 
use except for pleasure . 

They fixed the price of farm labor also. 

"The state now steps in to provide bread at a 
price within the means of our poorer class. The millei 
and the baker each make a reasonable profit.'" 

Great Britain took the broad view that bread was 
a necessity for all her people, whether in the trenches. 
. on the water, in the factory, mine, or on the farm ; a 
PUBLIC NECESSITY THAT SHOULD BE MET BY 
A PUBLIC TAX, if necessary, "to keep the price 
within the means of the poorer class." 

The foregoing is a reasonable, logical, common 
sense and just solution of the problem. 

Mr. Hoover came over to help our allies; but pre- 
tended that he wanted to protect our farmers from 
"that one European buyer who might have us at his 
mercy," etc. He knew the British plan, and that it 
was working satisfactorily. Why, then, did he mis- 
represent the situation to President "Wilson? 

Taking into consideration the cost of transporta- 
tion to Great Britain of the wheat if the British plan 
had been duplicated, the farmer, the miller and the 
baker would each have had a "reasonable profit," and 
all the consumers of the nation a one-pound loaf of 
bread for four cents. 

This "stabilizing of prices" is of more interest 
to the consumer than to the producer. 

Our producer received one-third less for his 
wheat,, and our consumer paid twice as much for his 
loaf of bread, all under the same controller. 

It is one of the great lessons of the war, that must 
be heeded. 

Bread is, and always will be, the standard of our 



POUND LOAF FOR FOUR CENTS POSSIBLE 89 

food. It is a vital public necessity, and must be freed 
from the greed of private monopoly. This the state 
ean and must do. The wheat we grow in our own 
state in abundance and to spare for export. The 
world's law of supply and demand will and should 
control the price of wheat. We must insist on a free 
and open market for its sale. 

AVe must provide a state flour mill, to provide 
flour for our own use ,and control by license all floui 
mills in the state. 

We must control by license all bakers in the state 
seeing that each one who performs a useful purpose 
will be adequately paid, but also see that Our Daib 
Bread Will be Freed From the Greed of Private Mo- 
nopoly in our own state. 

PUBLIC UTILITIES LEGISLATIVE COMMITTEE. 

Just as the last form is going to press I have read 
the report of our State Public Utilities Committee. 

I am surprised that the committee could not se- 
cure sufficient data from the report of the Federal 
Trade Commission even as given in the daily press, 
to convince them of the urgent necessity of a change 
in our milling system. I am sure that there was enough 
to convince the average person. I would have been 
very glad to have given the information. 

The excess profits were large in 1915 ; larger in 
1916 ; and for 1917 the Trade Commission reports, and 
this alone should have been sufficient for almost- any 
committee : 

"CASES WHERE PROFITS JUMPED MORE 
than 100 PER CENT IN THE FLOUR, FEED AND 
GRIST MILLING BUSINESS WERE TOO NUMER- 
OUS TO MENTIIN." See page 80. 

"It is much to be regretted that" the committee 
did not have that information. 

AVhat excess profits should be tolerated before we 



90 UTILITIES LEGISLATIVE COMMITTEE 

IN RE TERMINAL ELEVATORS. 

In r e terminal elevators ,the committee seemed to 
have received too much information, which sometimes 
is a misfortune; for instance, I quote from report: 

"There are no terminal elevators in this state, nor 
are there any state owned terminal elevators in this 
country. 

"The experiment has been tried out in the pro- 
vinces of Canada during the last twenty years. This 
public ownership plan of our neighbors seems to have 
been a failure, for such terminals are now either in 
private ownership or leased to private organizations." 

Of course, I knew better, because I had the official 
reports in my possession before writing on the subject, 
but in view of the standing of the committee and the 
official position in a leading farmers' organization of 
the chairman, I wrote promptly to the department in 
charge as follows: 

"March 3, 1919. Hon. Minister of Trade and Com- 
merce, Ottawa, Canada. Dear Sir : Would you kindly 
advise me if the Canadian government has leased or 
sold any of its terminal elevators? 

"Has government ownership proven satisfactory 
in the main? 

"I have been making a study of this problem and 
the information received from you has been a great 
help to me. 

"Thanking you in advance for the courtesy, I re- 
main," etc . 

.To this I received the following reply of date — 

"Ottawa. March 7, 1919. Canadian Government 
Terminal Grain Elevators. 

"Replying to your letter of date March 3rd, with 
regard to the leasing of Canadian government ele- 
vators, I beg to state that the Canadian government 
has not leased any of its terminal grain elevators. 
Government operation in the main has proven satis- 
factory. 

"Yours truly, F. C. T. O'Hara, Deputy Minister." 

I have given the official address, so that next time 



TX RE TERMINAL ELEVATORS 91 

the committee will know where to write for informa- 
tion. 

The committee may have had in mind the province 
of Manitoba, a comparatively small part of Canada, 
where the province built a number of primary eleva- 
tors, and after a limited trial leased them to a farmer 
co-operatice company — The Grain Growers Grain Co., 
which has been a phenomenal success. The object 
aimed at has been successful. 

FOR ADVERTISING STRATEGIC LOCATIONS. 

This study is intended for any state in the union, 
although in its inception intended more especally for 
our northwestern and western wheat growing states, 
where the agitation for public ownership of public 
utilities is rapidly growing in the interest of the 
producers. 

AVhat is said of conditions in this state will apply 
to any wheat growing state, so far as the handling of 
wheat is concerned. 

What has been said of wheat, flour and bread, 
may safely be said of our livestock and meat; where 
private monopoly has even a more perfect control. 
However, it is conceded that the more urgent, uni- 
versal need is cheaper bread; let us concentrate on 
THE LOAF, and when successful in eliminating the 
unnecessary expense of handling between producer 
and consumer on BREAD, it will be much easier to go 
" right down the line" for all food products. 

The problem is not a farmers' or producers' prob- 
lem only, and should 'not be considered as class legis- 
lation, nor in the interest of any class, profession or 
industry. 

The LOAF OF BREAD is the one universal need 
of all classes and professions, and the remedy can be 
applied in every state BY THE STATE. 

Any citv in South Dakota, wishing to enter the 
race as THE STRATEGIC LOCATION for the first 
Terminal Elevator and Flour Mill, can have an edi- 



92 HOW TO SECURE SPECIAL EDITIONS 

tion printed with its advertisement in place of that of 
Watertown. 

Xo charge for advertisement Indeed I would 
like to see a good natured competition between "Wa- 
tertown, Sioux Falls. Aberdeen and Mitchell, all good 
receiving and distributing centers. 

I will be glad to do the same for any other city 
in any other state. 

WATERTOWN THE STRATEGIC LOCATION FOR 
SOUTH DAKOTA. 

From every viewpoint discussed thus far. Water- 
town would seem to be the one city that would mor 
nearly comply with the requirements for a terminal 
elevator for South Dakota than any other city in the 
state. I used it in mv illustration during the years 
18S7, 1888 and 1889. 

All of our grain not used in the state goes east tc 
market. 

Watertown is reasonably close to the eastern bor- 
der of the state. 

The northern half of the state might be termed 
the wheat growing section of the state. Xow, for the 
markets which should be our objective east and south- 
east. Take down your map and trace the railroad 
lines thatpass through or by transfer may pass through 
Watertown on the way east or southeast. 

Of course, each road will want as long a haul a?r 
possible on their own road, and in transfers I am tak- 
ing that into consideration. 

The Chicago. Milwaukee & St. Paul is the only 
outlet for Harding, and passes through Perkins, Cor- 
son, Walworth, close to Campbell, passes through Ed- 
munds and Brown, transferring at Bristol, Day coun- 
ty, through Clark .transferring at Elrod for Water- 
town. 

Again, passing through a part of Campbell, Mc- 
pherson and Edmunds, transferring at Roscoe, or pass_ 
ing on through Edmunds and Faulk, transferring at 
Faulkton. 



WATERTOWN THE STRATEGIC LOCATION 93 

Also Brown, Spink, Day and Clark, transferring 
at Aberdeen, or Redfield. Also, Marshall, Day and 
Clark, transferring at El rod. 

Also. Butte and practically through Meade, Zie- 
bach. Armstrong, Dewey and Corson to junction at 

The Chicago & Northwestern: Butte, Lawrence, 
Meade, Pennington. Jackson, Haakon, Stanley, Ly- 
man. Hughes. Hyde, Hand, Beadle, Kingsbury, Ham- 
lin, Sully, Potter Faulk Spink Clark Codington. 

The Minneapolis & St. Louis : McPherson, Ed- 
munds, Brown, Spink, Day, Walworth, Potter, Faulk. 
Spink Clark. Codington. 

Great Northern: Beadle Kingsbury, Clark, Ham- 
lin. Codington. 

A splendid network of railways touching or tra- 
versing every county west of Watertown, covering 
two-thirds of the state. 

In all of this network, there is very little lost mo- 
tion and no doubling up. As a strategic center for 
gathering in our wheat on the way to market it has no 
equal and the same, of course, is true of all other 
grains. 

THE STRATEGIC LOCATION FOR DISTRIBUTION 

For the reshipment of our grain, Watertown's fa- 
cilities for distribution are even better than for receiv- 
ing. 

Supposing that for a time we may have to ship 
a part to Duiuth. we have a direct route via the Great 
Northern. 

If Ave have to ship to Minneapolis, we have the 
choice of three roads, the Great Northern, the Min- 
neapolis & St. Louis and the Chicago & Northwestern. 

Going south and southeast, the Minneapolis & St. 
Louis strikes south from Winthrop, Minn., for Sioux 
City, Omaha, Des Moines and Peoria, 111. 

The Rock Island, which intersects the Chicago & 
Northwestern at Elkton, the Chicago, Milwaukee & 
St. Paul at Pipestone, and also at Ellsworth. 



94 ALSO FOR DISTRIBUTION OF FLOUR 

The Great Northern, going southeast to Sioux 
City. 

The Chicago & Northwestern, with a great net- 
work of railways covering Minnesota, Iowa, Illinois 
and Wisconsin. 

We can reach the Chicago, Milwaukee & St. Paul 
system at Pipestone, with its great system covering 
southern Minnesota, Iowa, Illinois and Wisconsin. 

A new road running northeast to connect with the 
Sault Ste. Marie is surveyed and partly graded, which 
when completed will couple up with the great Cana- 
dian Pacific system. 

Indeed, with this new road running north, we will 
have almost completed the north and south railroad, 
near the eastern border, intersecting railroads running 
east and west as I planned for in 1887 and later, with 
Watertown as the central distributing point. 

Watertown is the natural, logical, or as our Cana- 
dian neighbors would call it, the "strategic point" for 
receiving, cleaning, curing and treating (drying) and 
inspecting our grain for shipment to the millers direct. 

Once more I want to emphasize the fact that we 
must make conditions just as good for our farmers 
in production, handling, transporting and distributing 
as our competitors enjoy, or our appeals for "back to 
the farm" will fall on deaf ears, and Canada will get 
the cream of our young men who wish to engage in 
farming. 

For the distribution of flour and millstuffs Wa- 
tertown is an even better strategic location. The four 
counties to the east are especially well supplied with 
rail service. 

We have within 100 miles of Watertown, rail con- 
nection, one hundred and thirty-five farmers' co-opera- 
tive elevator companies. With the completion of oui 
road northeast we will add 25 or 30 more. Their 
trade alone should insure the success of the flour mill 

Again, and what is very important, the sentiment 
in Watertown in favor of public utilities is very strong 
indeed. 



The Great Conspiracy of the 
House of Morgan Exposed 

EXTRACTS FROM FOREWORD: 

An expose of the insincere, buncombe interest in 
Rural Credits by the practical politicians in distress 
— before election — and the gross betrayal of the farm- 
ers after election. 

A practical plan for state development by the is- 
sue of money based on what is universally conceded 
to be the best security in the world — productive land — 
administered without private profit, with the maxi- 
mum of security, and at the minimum of expense, by 
the use of our present political units 

A general treatise of money and its functions. 

An expose of the greatest conspiracy ever con- 
ceived by the brain of men to control all the commerce 
and industry of a great nation, through a private 
monopoly of money, the life blood of commerce, by a 
group of avaricious, conscienceless financiers, whom 
for brevity I shall name The House of Morgan. 

I trace that conspiracy from 1862 up, but more 
especially during its rapid development the past ten 
years, or from the date of the Bankers' Panic of 1907, 
when J. P. Morgan. Sr., was crowned Sovereign. 

It has never been my custom to criticise, or try to 
tear down, unless I think that I can build better. In 
accord with that principle I point out how we may 
free labor from the power of money to oppress. 

I offer this as a first instalment, as it were ; the 
result of 30 vears' careful study and investigation, 
with an open mind; seeking the TRUTH for TRUTHS 
sake. 

I am sure that my foundation is builded on the 
solid rock of justice, equity and righteousness. So 
believing, I am willing to meet all comers in the 
defense of my position . 

Cloth Cover, $1.25; Paper, 65c 

H. L. LOUCKS, WATERTOWN, S. D. 



USURY 



A Book that Every Professing Christian Should Bead 

By RET. JOHN CALVIN ELLIOT 



This is an up-to-date book and is worth while to read; 
every chapter is an eye opener. It is a clear, strong and 
convincing argument against interest or increase on any loan 
of any kind. 

This book shows clearly that usury was condemned by 
Moses, by David and Solomon and Jeremiah and Ezekiel and 
Xehemiah, and by the teachings of the Great Master, and 
was not practiced but condemned by his followers, as shown 
through seventeen hundred years of church history; that it 
is des of the sovereign rights of man and the just 

equality of men: that it is based on a false ethical and also 
a false economic principle; that usury thrives on debt and 
therefore encourages the debt habit in individuals and mu- 
nicipalities and nations; that the borrower is servant to the 
lender, whether that borrower be an individual or an empire. 
The book shows in four chapters, how usury oppresses the 
poor through no fault of their own, and how impossible it is 
to prevent this, and how the poorest suffer the most. This 
book shows how usury centralizes the wealth of the wealthy 
into fewer and fewer hands, absorbing the smaller fortunes 
into one colossal financial power, and how futile it is to resist 
this fate; how the great debes of the nations now enable 
the usurers to dominate the world; how this degrades ideals 
>wers character; how usury is the root of many of the 
social and industrial evils; that it builds the- wall between 
1 and labor; that it is the principal hindrance to the 
world's peace. The reasons why this evil was permitted 
to grow to such enormous proportions and to overrun the earth 
are franklv stated and the book closes with a chapter, "Crushed 
Truth Shall Rise Again," which is a clear strong, optimistic, 
convincing argument that usury will be overthrown as many 
other as deeply entrenched wrongs have already been. 



Chapters. 300 Pages. Cloth Bound, SI. 00 



Send orders to 

H. L. LOUCKS. 

WATERTOYVN, SO. DAK. 



II ^\ r 



% 



a y • 



*> 



A>«* - ^lOI^ o <3 ^ 











v y 







^. 



*-_..• 

























*° »•« 



